It recently emerged that the Kenya Airports Authority (KAA) has entered into a deal with Adani Airport Holdings Limited, to operate Jomo Kenyatta International Airport (JKIA).
The move has triggered uproar with Kenyans seeking to know the truth or otherwise of the claims.
In a statement, KAA acting managing director Henry Ogoye confirmed that the KAA received an investment proposal under the Public Private Partnerships Act 2021 from Adani Airport Holdings Limited.
KAA said Adani is an Indian Group and a key airport operator, which wishes to invest in a new passenger terminal building, a second runway and refurbishment of the existing facilities at JKIA.
At the same time, civil society organizations, including the Law Society of Kenya (LSK), Kenya Human Rights Commission (KHRC), Africa Centre for Open Governance (AFRICOG) and The Institute for Social Accountability (TISA) has demanded full disclosure on the reported deal between KAA and Adani Group.
In a letter addressed to Ogoye, Bond Advocates LLP, acting on behalf of the civil society groups, has raised significant concerns regarding the transparency, legality and value for money of the alleged deal involving JKIA.
The letter requests copies of all correspondence and minutes of meetings held by KAA regarding the deal, including communications with Adani Group and the Public Private Partnership Committee, as well as information on how Adani Group was selected for the deal.
It further asks for details on the procurement process of ALG: Global as the transaction advisor; a copy of the feasibility study or financial sustainability report prepared by ALG: Global; and copies of the contracts between KAA and ALG: Global and KAA and Adani Group.
But why is Adani Group interested in the deal and who is the man behind the Indian firm?
Adani Group
The multinational conglomerate headquartered in Ahmedabad was founded by Gautam Adani in 1988 as a commodity trading business.
The Group’s businesses include sea and airport management, electricity generation and transmission, mining, natural gas, food, weapons and infrastructure.
At its 2022 peak, Adani was the largest Indian conglomerate, with a US$206 billion market capitalization, surpassing Tata Group.
However, it lost more than $104 billion in value after fraud and market manipulation allegations by short-seller firm Hindenburg Research.
In May 2024, the Adani Group’s market capitalization returned to over $200 billion after the Supreme Court directed the Securities and Exchange Board of India (SEBI) to expedite its investigation.
Who owns Adani Group?
Gautam Adani is the founder and chairman of the Adani Group. He is currently the 16th richest person in the world with a net worth estimated at $82.3 billion as of February 2024.
Adani, a first-generation entrepreneur, is known for his nation-building vision and philosophy of “Growth with Goodness”.
He has transformed India’s coastline by building a string of ports and logistics hubs, strengthened the country’s energy security and boosted food security through modern agriculture supply chains.
However, Adani’s business empire has faced scrutiny in recent years.
In January 2023, the Hindenburg Research report accused the Adani Group of stock manipulation and accounting fraud, leading to a plunge in the group’s market value.
The Supreme Court later dismissed requests for an investigation into the allegations.
Despite the controversies, Adani continues to expand his business footprint. In June 2024, he surpassed Mukesh Ambani to become the richest person in Asia.
How did Gautam Adani make his fortune?
Adani’s wealth primarily stems from his significant stakes in several publicly traded companies within the Adani Group, which he founded.
The flagship company, Adani Enterprises, is involved in mining, edible oil, defense, and airport management, and Adani owns a 75% stake.
Adani Ports, India’s largest private port operator, is another major source of wealth, with Adani owning a 66% stake.
Adani Power, India’s largest private thermal power producer, also contributes significantly to his net worth, with Adani owning a 72% stake.
Adani Green Energy, which focuses on renewable energy projects, is another key asset, with Adani owning a 56% stake.
Adani Total Gas, a joint venture with Total Energies for city gas distribution, and Adani Energy Solutions, formerly known as Adani Transmission and involved in power transmission and distribution, also contribute to his wealth, with Adani owning 37% and 73% stakes, respectively.
In addition to his stakes in Adani Group companies, Adani owns significant real estate assets in India, including commercial and residential properties.
He has also invested in other Indian companies, such as Ambuja Cements and ACC, which he acquired from Holcim for $10.5 billion in 2022.
The rapid growth of the Adani Group companies, especially in the infrastructure and energy sectors, has led to a significant appreciation in the value of Adani’s stakes, which has been a major contributor to his wealth.
However, it’s important to note that Adani’s net worth is primarily based on the market value of his shareholdings, which can fluctuate significantly, as evidenced by the sharp decline in the group’s market value following the Hindenburg Research report in January 2023.
Controversies
Adani and the Adani Group have been embroiled in several controversies over the years, primarily related to allegations of financial misconduct and political connections.
For instance, in January 2023, Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud, claiming that the group used offshore entities to inflate stock prices.
This led to a significant drop in the market value of Adani’s companies and prompted investigations by India’s Supreme Court and market regulators.
The Adani Group denied these allegations, labeling them as malicious and politically motivated, asserting that they were an attack on India’s economic growth and institutions.
Additionally, the Adani Group has faced scrutiny for its political ties, particularly with Prime Minister Narendra Modi.
Critics allege that Adani has benefited from favorable government contracts due to his close relationship with the Modi administration.
This cronyism has been a recurring theme in discussions about the group’s rapid expansion in various sectors, including energy and infrastructure .
Past controversies include a 2007 ban by the Securities and Exchange Board of India (SEBI) on several Adani companies for their involvement in a stock-rigging scheme, and investigations into alleged bribery and financial irregularities involving the Directorate of Revenue Intelligence (DRI).
More recently, U.S. authorities have launched investigations into potential bribery linked to Adani Group projects, further complicating the conglomerate’s reputation.
