Sh32Bn graft suit in US forces Ruto to drop Adani contracts
In a suit filed on Wednesday in a New York court, Gautam Adani and other officials of Adani Group are facing accusations of orchestrating a $250 million bribery scam in India and concealing the fraud to raise funds in US markets.
Stung by mounting calls to fight corruption in his administration, President William Ruto appeared to yield to pressure on Thursday, directing the immediate cancellation of multi-billion-shillings deals involving scandal-ridden Indian billionaire Gautam Adani.
President Ruto's directive came just hours after the tycoon was indicted in the US with federal agencies accusing his companies of involvement in bribery schemes estimated at $250 million (about KES32.3 billion) to secure $2 billion worth of solar power contracts in his home country India.
"I now direct, in furtherance of the principles enshrined in Article 10 of the Constitution on transparency and accountability, and based on new information provided by our investigative agencies and partner nations, that the procuring agencies within the Ministry of Transport and the Ministry of Energy and Petroleum immediately cancel the ongoing procurement process for the JKIA Expansion Public Private Partnership (PPP) transaction, as well as the recently concluded KETRACO transmission line Public Private Partnership contract, and immediately commence the process of onboarding alternative partners,” Dr. Ruto told lawmakers during his State of the Nation speech in Parliament.
Adani's Sh95 billion KETRACO contract
Dr. Ruto's directive will throw into disarray a KES95.68 billion ($736 million) energy infrastructure investment agreement signed in October between KETRACO and Adani Group. The contract was to see the Indian firm develop, finance, construct, and operate critical transmission lines and substations across Kenya.
However, earlier on Thursday, Energy and Petroleum CS Opiyo Wandayi defended the Indian company, noting that the government carried out due diligence on the Adani Group before contracting the conglomerate.
“On the matter of Adani's indictment, under section 41 of the Private Public Partnership (PPP) Act, we have an elaborate mechanism for undertaking due diligence,” Wandayi told the Senators.
Across the Atlantic, however, in the suit filed on Wednesday in a New York court, Adani is facing accusations of orchestrating a $250 million bribery scam and concealing the fraud to raise capital in US markets.
Adani's business empire extends from ports and airports to renewable energy investments across multiple countries in the world.
In March 2024, Adani Group submitted a privately initiated proposal for a 30-year concession to expand and operate the Jomo Kenyatta International Airport (JKIA) under a "build, operate, and transfer" plan.
The Adani proposal, estimated at $1.85 billion or KES242 billion, triggered unrest among Kenya Airport Authority (KAA) employees, who downed their tools paralyzing operations at East Africa's busiest airport citing concerns about job security and the implications of Adani's involvement.
The deal has been shrouded in secrecy, leaving President Ruto's senior government officials at pains to explain the nature of the agreement with JKIA.
Read also: Scandal-ridden Adani Group eyes JKIA expansion deal
Adani fingered for accounting fraud in US
According to the BBC, Adani Group has been operating under a cloud since last year when US short-seller Hindenburg Research published a note accusing the multinational of "brazen" stock manipulation and accounting fraud.
In their suit in New York, US prosecutors are alleging that Gautam Adani as well as other senior officials had agreed to the payments of roughly $250 million to Indian officials to secure business deals for his renewable energy arm, projecting to earn over $2 billion in profits within two decades.
Adani Group has countered the allegations, terming them "baseless."
The move to cancel Adani Group deals in Kenya comes in a week when President Ruto's administration has come under heavy criticism from the church, which called out his government for lackluster measures to fight corruption.
On November 14th, 26 bishops under the umbrella of the Kenya Conference of Catholic Bishops (KCCB) faulted Dr. Ruto's administration over poor measures to tackle corruption, human rights violations, and punitive tax policies.
Since then, the government and senior officials have been on the receiving end with other churches including the ACK throwing their weight behind the Catholic Church.
