Rahul Gandhi Attacks Modi’s Adani Connections
One of the Adani Group’s buildings in Ahmedabad, India. Source: REUTERS/Amit Dave/File Photo
India’s primary opposition leader, Rahul Gandhi, recently claimed he was unfairly ousted from the Parliament due to questioning Prime Minister Narendra Modi on his dealings with the Indian business conglomerate Adani Group, additionally labeling it the “symbol of corruption” during an election rally in the Indian state of Karnataka.
The Adani Group is one of India’s largest business conglomerates. It invests in industries such as infrastructure, mining, renewable energy, and real estate. It has been closely associated with Modi, with its founder, Gautham Adani, backing Modi ever since he was Chief Minister of the Indian state of Gujarat in 2002. Subsequently, the Group’s net worth has grown by over 2000% since 2014, which is also the year Modi took office. As such, the rise of the Adani Group has been widely linked to Modi’s rise in power, with accusations that Modi has directly aided Adani become the giant it is today – accusations Rahul Gandhi has been touting.
The Adanis’ fortunes took a turn for the worse when American short-seller Hindenburg Research released a scathing report accusing Adani of pulling “the largest con in corporate history”. Specifically, it accused Adani of improperly using tax havens and taking in unsustainable debt. Hindenburg is known for having unraveled major frauds in the past, and as a result, the stock crashed by $92 billion. The Adani Group responded by issuing a 42-page report reassuring investors and calling Hindenburg’s report an “calculated attack on India'', causing the stock price to rebound slightly following investment by Indian buyers.
Upon the release of the Hindenburg report, India’s Supreme Court set up a panel to investigate Hindenburg’s allegations and ordered the Securities and Exchange Board of India to probe
“whether there was any manipulation of stock prices in contravention of existing laws”.
Rahul Gandhi protesting the Modi government’s involvement with the Adani Group in Parliament. Source: ANI
Modi has responded to the allegations once during a Parliament session where opposing lawmakers interrupted his speech shouting slogans demanding he address the situation, to which he said “The blessings of 1.4 billion people in the country is my protective cover and you can't destroy it with lies and abuses”. Beyond this statement, he has remained silent on the affair.
Overall assessments of the Adani Group are mixed. While Hindenburg and their supporters allege a malicious pattern of accounting fraud, Indian nationalists paint a picture of an Indian company unfairly being slandered by a Western firm. NYU professor Aswath Damodaran takes a middle ground, stating that it “has exploited the seams and weakest links in the India story, to its advantage” – namely, the inherent benefits family-owned groups have in the Indian economy.
Upon being asked for further comment, Damodaran stated that “One reason that [he] was skeptical of the corporate fraud basis for the Hindenburg report is that there is no mention of or evidence presented for political favoritism, which would be the strongest case against the company.” While the debate around the government favoring the Adani Group rages on, attacks by Rahul Gandhi and other political opponents may pose a challenge to Modi’s political future.