Skeletons of Adani's dark past exposed as JKIA takeover looms

In the high-stakes world of billion-dollar conglomerates, the Adani Group stands out as a symbol of ambition and controversy.

At its helm is Gautam Adani, a man whose dramatic rise from a humble commodities trader to one of Asia's richest individuals is as astonishing as it is contentious.

Yet, beneath the glittering façade of his empire lies a human cost that extends far beyond boardrooms and balance sheets.

Gautam Adani, whose Sanskrit name translates to "sun" and "darkness," embodies the duality of his businesses, celebrated for entrepreneurial success yet ensnared in controversy.

The accusations have created a battle for power, pitting his empire against the less fortunate, who seem unable to fight back due to Adani's political connections and financial muscle.

Legislators, authorities, media, experts, and activists accuse Adani of stock manipulation, running offshore tax havens, environmental destruction, and human rights abuses.

Australian Senators Richard Di Natale (Victoria), Janet Rice (Victoria), and Peter Whish-Wilson (Tasmania), published a report on their website with the allegations.

“In 2013, an independent committee established by the Indian Ministry of Environment and Forest found 'incontrovertible evidence' that an Adani Group company operating a large coal-fired power plant and port in Mundra, India, had violated the conditions of its environmental approval and caused destruction of mangroves in a conservation area, obstructed creeks and the tidal system, failed to prevent salinity intrusion into groundwater, and constructed an airstrip without approval,” read the report.

Adani’s fortunes have soared across a dizzying array of sectors including ports, power, airports, mining, renewables, media, and cement.

Yet, this success story is marred by a series of explosive allegations published by human rights activists and parliaments in Asia, Europe, the USA, and now Africa, particularly Kenya.

“Governance systems in this country are designed to fail by allowing leaders to have avenues for looting State resources and creating demigods whose agenda is to grab as much as they can so that during elections, they buy you again to vote for them! The cycle goes on and on. Be vigilant,” Senator Richard Onyonka, who has been vocal against the Jomo Kenyatta International Airport (JKIA) Adani deal, said on X.

Under Adani Airport Holdings, Adani secretly seeks to take over JKIA for 30 years. His plan includes changing aviation laws and policies to prevent competition and maximise profits, overriding Vision 2030.

With President William Ruto’s inner circle heavily involved, Adani does not want Kenya to build a new competitive airport for the next 30 years.

“The existing litigation regarding the land at JKIA will be the responsibility of the Kenyan government,” the Private Investment Proposal (PIP) which The Standard has seen, states.

Adani has also demanded the establishment of a fund by the State to cover damages if the JKIA deal is terminated, regardless of the reasons.

The plan keeps Kenya’s 38 airports stagnant and prevents development of new airports without Adani’s approval, a deal which President Ruto has publicly defended.

Adani will handle all losses and disputes, while the government will finance the project and manage existing issues. He will also control land access, tax exemptions, and fees, fix and raise prices, and repatriate earnings.

“An additional runway is not required until the end of the concession period in 2054,” Adani said, reducing its role to managing the airport and refurbishment only.

As Ruto defends the JKIA leasing project, the US is digging deeper into the Adani Group, now zeroing in on the founder for alleged bribery linked to an energy project. Bloomberg media has reported that the probe, led by New York and DOJ fraud units, also targets Azure Power Global.

US media reported this year that the group has denied any knowledge of the investigation and added that the stocks plummeted last year after Hindenburg Research accused the company of serious financial misconduct, which Adani strongly disputed.

In the financial realm, Hindenburg Research’s forensic report accused Adani of misusing tax havens and aggressive accounting practices, highlighting a staggering US$11 billion loss in investor wealth linked to high debt and dubious stock valuations. Adani swiftly dismissed these claims as “malicious fabrications” and warned of legal action against Hindenburg.

Adani, who shares his origins with India’s Prime Minister Narendra Modi in Gujarat, staunchly denies these claims, attributing them to rivals eager to tarnish his reputation. In Mundra, India, Adani operated one of the world’s largest coal-fired power plants.

Investigations by Indian officials, independent committees, and film crews have uncovered a history of environmental destruction, harm to local communities, and non-compliance with environmental regulations and development permits.

According to assorted media reports Adani illegally cleared 75 hectares of protected mangroves, flattened sand dunes, dredged the ocean, and blocked waterways.

These actions resulted in diminished fish populations, salinised groundwater, and a flooded village. The impact on local villagers has been devastating. Once dependent on fishing and farming, they are now left with barren land and oceans; their fish stocks are decimated.

In 2013, an Indian committee found Adani’s Mundra operations violated environmental standards, leading to a fine of AUD975,000 for a sunken ship off Mumbai that caused harm by not being cleaned up for over five years.

A report at the Australian Parliament noted: "Villagers reported Adani using bribery and intimidation to silence anyone who tried to challenge them."

In Australia, where the Adani Group’s environmental record is under fire, a report filed with the Australian Parliament paints a grim picture of environmental devastation, detailing allegations of illegal land clearing, destruction of protected mangroves, and breaches that have left local communities suffering.

The Carmichael coal project in Queensland has been a particular focus, with critics arguing that the approvals process failed to consider Adani’s checkered environmental history adequately.

“Adani Transmission Ltd is also under investigation for the use of 'black money' associated with hiding profits by over-valuing capital equipment imports, and the use of an offshore holding company established by the Adani Group in Mauritius for receiving the extra money from the inflated invoices,” the senators said.

To tame Adani’s excesses, the Australian Senate developed the Stop Adani Bill (Environment and Infrastructure Legislation Amendment) in 2017 to tighten oversight and ensure that a company’s environmental record is scrutinised before any project approvals or funding is granted.

The reforms come amid growing concerns that the provisions were too lax, allowing companies to exploit loopholes and bypass critical environmental safeguards.

"The fact that Adani's projects in Queensland have been approved despite its appalling environmental record demonstrates the urgent need for this bill," reads a report dubbed A Short History of Corruption, Destruction, and Criminal Activity.

The report criticised the current provisions of the law for being insufficient, noting that, “leaving a company’s environmental destruction as a discretionary consideration results in perverse and damaging outcomes.” 

Environmental Justice Australia’s submission highlighted severe breaches following Adani's activities. The Australian report said that in January 2016, the Indian National Green Tribunal revoked Adani Hazira Port’s approval for illegal work that blocked fishing access.

Additionally, Adani Mining Pty Ltd’s director was involved in pollution offences in Zambia, which were not disclosed to Australia’s Environment Minister.

"The approvals reveal flaws in the law, which the Bill aims to address by mandating that a company’s environmental record be considered in the approval process," Australia's parliament said.

The Chief Executive Officer (CEO) of Adani's Australian branch, Jeyakumar Janakaraj, came under scrutiny due to his previous role at Koncola Copper Mines (KCM) in Zambia.

During his tenure as operations director in 2010, KCM faced charges and fines for polluting the Kafue River with toxic wastewater.

This incident has sparked renewed concerns about Adani's suitability to manage Australia's largest proposed coal mine.

According to the Guardian, “Janakaraj's past involvement with KCM raises questions about Adani’s ability to manage environmental risks.” 

The Economic Times reported that in 2011, a ship carrying Adani coal sank off the coast of Mumbai, devastating beaches, tourism, and marine life. “Adani did nothing to clean up the mess for five years,” raising further concerns about the conglomerate’s environmental responsibility.

Civil society organisations Environmental Justice Australia and Earth Justice, have highlighted these concerns, questioning whether Adani can be trusted to comply with environmental regulations. They argue similar violations in Australia could jeopardise Adani's eligibility to operate the Carmichael mine in Queensland's Galilee Basin.

The issue has prompted calls for scrutiny by Australian authorities regarding Adani's environmental track record and its implications for projects like the Carmichael mine, which critics fear could impact the Great Barrier Reef.

The decision to approve the Carmichael mine's environmental clearance by Federal Environment Minister Greg Hunt is now facing legal challenges.

Critics argue that the approval process inadequately considered the project’s climate impact on the reef. Hunt’s department has pledged to seek clarification from Adani regarding the issues raised in the report.

A company spokesman defended Janakaraj, stating that he had “wide-ranging experience that has contributed to his acute belief in proactive good environmental management.”

The Adani Group’s controversy extends beyond environmental issues as reports surfaced on the exploitation and underpayment of their workforce, including the use of child labour.

A report filed with the Australian Parliament revealed that “Adani has exploited and underpaid their workforce, including using child labour. Adani can’t be trusted to follow the rules and look after workers in Australia.”

According to a damning report by Hindenburg Research, a forensic financial firm renowned for its incisive exposés, Adani also used tax havens in the Cayman Islands to hide assets and dodge taxes.

It raises alarms over a staggering US$11 billion loss in investor wealth linked to high levels of debt and dubious stock valuations. 

Founded by Nathan Anderson in 2017, Hindenburg has made headlines for uncovering corporate malfeasance, and their latest target is the Adani Group.

The Hindenburg Research report accused Adani of misusing tax havens, stating: "Our investigation reveals Adani Group has been involved in aggressive accounting practices and use of offshore entities to obscure financial dealings."

The report also highlighted concerns about the conglomerate’s high debt levels, suggesting that “the company's financial health is precariously balanced on a foundation of over-leveraged debt.”

Adani’s response was swift and fierce, dismissing Hindenburg’s findings as a “malicious combination of selective misinformation and stale, baseless, and discredited allegations.”

On May 3, 2024 Securities and Exchange Board of India (Sebi) issued violation notices to seven Adani Group companies, including Adani Enterprises, over Hindenburg Research's claims of tax haven misuse and stock manipulation, which Adani denies.

Adani Enterprises was cited for failing to meet listing standards and disclose related-party transactions, with no major impact claimed. Other affected companies include Adani Green Energy, Adani Power, Adani Total Gas, Adani Energy Solutions, Adani Wilmar, and Adani Ports. Violations may lead to fines or market bans.

Adani Power’s notice involved unreported transactions, while Adani Wilmar, Adani Total, and Adani Green faced auditor review issues after investigations.

As Adani's empire continues to expand, the debate over its impact—both economical and environmental—remains fiercely contested. The group’s story is one of extraordinary ambition tempered by profound controversy, leaving a complex legacy that is still unfolding.

On May 15, Norges Bank, Norway's central bank, announced the exclusion of three companies from its government pension fund due to ethical concerns. The companies affected are India's Adani Ports and Special Economic Zone (APSEZ), U.S.-based L3Harris Technologies, and China's Weichai Power.

Adani Ports, part of Gautam Adani's conglomerate, was excluded because of concerns regarding its involvement in activities that could contribute to "serious violations of individuals' rights in situations of war or conflict.

"The company has been under observation since March 2022, but that observation now ends given the exclusion decision," said Norges Bank.