Kenyan President William Ruto has decided to cancel two major deals involving the Adani Group, an Indian multinational company. This decision comes after the company’s founder, Gautam Adani, was charged in the United States, raising concerns about the group’s operations.
The first deal was a plan to hand over the management of Kenya’s main airport to the Adani Group. President Ruto ordered the cancellation of the entire process, ensuring that the airport will not be controlled by the company.
The second agreement was a $736 million partnership between Kenya’s energy ministry and a unit of the Adani Group. This 30-year deal was aimed at building power transmission lines in the country. President Ruto directed that this agreement also be canceled, signaling a move to protect national interests in light of recent events surrounding the Adani Group.
Kenya Cancels Adani Group Deals
The Kenyan government announced the cancellation of its airport and energy agreements with the Adani Group on Thursday, shortly after the conglomerate’s chairman, Gautam Adani, was indicted in New York for his alleged involvement in a multi-billion-dollar bribery and fraud scheme, as reported by AFP.
President William Ruto directed agencies to “immediately cancel” the procurement process for projects involving Nairobi’s Jomo Kenyatta International Airport (JKIA) and a state-owned electricity service linked to the Adani Group.
During a state of the nation address, Ruto explained that the decision was based on “new information provided by our investigative agencies and partner nations,” though he did not mention the United States specifically, according to the Associated Press. “In the face of undisputed evidence or credible information on corruption, I will not hesitate to take decisive action,” Ruto stated.
The Adani Group had been negotiating a deal to upgrade Nairobi’s main airport with a new runway and terminal, which would have allowed the company to operate the facility for 30 years.
However, the agreement faced strong opposition in Kenya. Airport workers protested in September, fearing the deal would result in job losses and deteriorating working conditions, according to AP.
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Gautam Adani Indicted by US Authorities
The US Department of Justice has accused Gautam Adani, founder of the Adani Group, along with his nephew Sagar Adani and senior executives of Adani Green, of engaging in bribery. They allegedly offered $265 million in bribes to Indian state officials to secure solar power contracts.
The allegations claim that Adani Green influenced state government officials in Odisha, Andhra Pradesh, and potentially Tamil Nadu, Chhattisgarh, and Jammu and Kashmir (J&K). These officials reportedly pressured power distribution companies (discoms) to buy solar power at rates higher than the market standard.
The Adani Group has denied these claims, labeling them as “baseless” and affirming its compliance with all legal requirements.
Despite the denial, the controversy has significantly impacted the stock market. Shares of Adani Group companies, including Adani Enterprises, Adani Energy Solutions, Adani Ports, and Adani Green Energy, witnessed a steep decline of up to 23% on Thursday.
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FAQs
Q.1. Why did Kenya cancel deals with the Adani Group?
Ans. Kenya canceled deals with the Adani Group after its founder, Gautam Adani, was indicted in the US for alleged bribery and fraud.
Q.2. Which Adani Group projects were canceled by Kenya?
Ans. The projects included a plan to manage Nairobi’s main airport and a $736 million deal to build power transmission lines.
Q.3. What were the concerns surrounding the airport deal?
Ans. Airport workers protested, fearing job losses and reduced working conditions if the Adani Group took over management.
Q.4. What are the bribery allegations against Gautam Adani?
Ans. US authorities accuse Gautam Adani of offering $265 million in bribes to Indian state officials to secure solar power contracts.
Q.5. How has the controversy affected the Adani Group?
Ans. Following the allegations, Adani Group’s stock prices plummeted, with shares dropping by up to 23%.
