Parliament witnessed unprecedented exchange of harsh and critical comments between the treasury and opposition benches after Congress leader Rahul Gandhi sought to link PM Modi’s relationship with Adani Group to the company’s phenomenal growth, writes Mudit Mathur
After three consecutive days of complete logjam, the budget session of Parliament of India witnessed unprecedented exchange of harsh and critical comments between the treasury and opposition benches over the questions raised with regard to proximity of Prime Minister Narendra Modi behind the meteoric rise of Adani Group conglomerate after 2014. Unruly scenes marred when the opposition demanded setting up a joint parliamentary committee (JPC) or Supreme Court-led probe into the Hindenburg Research report – that alleges fraud and irregularities in the business of the Adani Group companies.
Prime Minister Narendra Modi did not reply to the questions raised by rejuvenated Congress leader Rahul Gandhi, after his Bharat Jodo Yatra from Kanyakumari to Kashmir. Taking the pot shots at Congress leader Rahul Gandhi, Modi said, “I have the protective shield of the trust of 140 crore countrymen and you cannot pierce this protective shield with your lies.”
While participating in the debate over motion of thanks on presidential address, Rahul Gandhi launched a frontal attack on PM Modi linking his inextricable relationship with Adani Group to the company’s phenomenal growth. Rahul made scathing remarks against Modi as he posed tough questions after domestic investors suffered huge losses owing to the report of Hindenburg Research.
Hindenburg report accused Adani conglomerate of stock manipulation, accounting fraud and using offshore shell entities in tax havens allegedly routing his own money through machinations of his brother. It also accused Adani of pulling off the “largest scam in corporate history”.
Though Adani hit back saying the research report is “malicious”, “baseless” and a “calculated attack on India” threatening to take a legal action against the short seller, Hindenburg stuck to its guns saying that it’ll welcome any action and will demand documents in the legal process. The Financial Times reported that Adani Group has hired New York-based law firm Wachtell, Lipton, Rosen & Katz to challenge the allegations raised by short-seller Hindenburg Research against it, as the shares of the group’s listed firms continued to take a beating on the Indian stock market on Friday(10th February).
A ‘Forbes’ analysis revealed that three investment funds with ties to the Adani Group committed to buying up shares as investors in the Adani Enterprises’ share sale. The three firms are: Mauritius-based funds, Ayushmat Ltd and Elm Park Fund, and India-based Aviator Global Investment Fund. These three firms together agreed to buy 9.24% of all shares available to anchor investors. Anchor investors are allotted shares a day before the share sale opens and that builds the tempo of investment among the common investors.
According to Forbes valuation estimates, Gautam Adani’s current net worth stands at $58.2 billion — down nearly $7 billion on 10th February — making him the 22nd richest person in the world from the position of number two. Adani has seen his fortunes drop by more than 50% since Hindenburg’s allegations became public in the last week of January.
Nation saw live debate on Sansad TV on 7th February how the Congress leader Rahul Gandhi led the Opposition attack over the Adani-Hindenburg issue questioning the complicity of Prime Minister Narendra Modi and his government of pulling strings in his favour? “How many times did you (PM) travel together with Adani on foreign trips? How many times did Adani join you later on a visit? How many times did Adani travel to a country immediately after you did? How many of these countries after you visited Adani got a contract…Also, an important question is how much money has Adani given to the BJP in the last 20 years… through electoral bonds,” Gandhi quizzed.
Sharing his experience of the recently concluded “Bharat Jodo Yatra”, Rahul said, “From Tamil Nadu to Kerala, Maharashtra, Madhya Pradesh…everywhere we heard one name, Adani…. Adani, Adani…People asked me how it is possible that Adani tastes success in whichever sector he enters, he never fails. And they asked how Adani is entering every sector, he used to be in one or two sectors. Now, he is in eight-ten sectors: airports, data centres, cement, solar energy, wind energy, aerospace and defence, consumer finance, renewables, media, ports. They asked how the Adani Group’s net worth rose from US $ 8 billion to US $140 billion, taking him from 609 in the richest persons’ list in 2014 to 2 in 2022.”
“How to use government power to build individual businesses should be a case study in business schools and Modi should be given a gold medal in this,” he sarcastically remarked. Displaying old photographs of the Prime Minister sitting with Adani in an aircraft and boarding a plane carrying an Adani logo, Rahul alleged, “Adani was ranked 609 in the list of richest people in 2014. I don’t know through what magic…he has reached No. 2 now…so people asked how has he become successful, how he has entered so many businesses and, most importantly, what is his relationship with India’s Prime Minister?”
“The relationship began many years ago when Narendra Modi was the Chief Minister of Gujarat and when most of India’s business was asking questions of the Prime Minister, was against the Prime Minister…one man stood shoulder to shoulder with the Prime Minister. That is commendable, he was loyal to the Prime Minister and he helped Modi construct the idea of a resurgent Gujarat…the result of that was tremendous growth of his business in Gujarat, expansion of his businesses,” he said.
Gandhi said the “real magic” started after Modi moved to Delhi in 2014. “There was a rule that anybody who does not have prior experience in airports cannot be involved in development of airports. The Government changed this rule…and Adani was given six airports. After that, India’s most strategic airport, profitable airport… Mumbai airport was taken away from GVK…hijacked by using agencies. By pressurising the GVK using CBI and ED…the Government gave that airport to Adani,” he alleged. However, GVK Group vice president denied the charge of transaction under duress .
Rahul said 24 per cent of the air traffic and 31 per cent of the freight traffic is handled by airports operated by Adani group. “The Indian government and the Prime Minister facilitated this,” he charged. Similarly, in the defence sector, Gandhi said, the Adani group had no experience but now makes drones in collaboration with an Israel firm. “Adani has never done this before. HAL and other companies in India had been doing this but the Prime Minister visited Israel and immediately after that Adani got the contract,” Gandhi said.
He alleged the Adani group’s defence companies are involved in making “small arms which include Tavor which is used by our special forces, Galil sniper rifle.” He attributed this to the PM’s visit to Israel after which “90 percent of the India-Israel weapons business goes to Adani after one visit.”
Referring to the controversy surrounding Adani’s coal mining in Australia, Gandhi said: “The Prime Minister goes to Australia and by magic SBI gives a $1 bn loan to Adani. The Prime Minister goes to Bangladesh, his first trip, decides to sell electricity to Bangladesh and after some days Bangladesh Power Development Board signs a 25-year contract with Adani.”
Gandhi also flagged the allegations regarding award of a project to Adani in Sri Lanka in June 2022. “The Chairman of the Sri Lanka’s Electricity Board informed a Parliamentary committee in an open hearing that he was told by then President (Gotabaya) Rajapaksa that Prime Minister Modi pressured him to give the wind power project directly to Adani…. So, this is your foreign policy…this is not India’s foreign policy. This is a foreign policy to build Adani’s businesses,” Gandhi said. On the other hand, the Sri Lankan government denied the allegation as the corporation’s chairman resigned and withdrew his statement.
Referring to the exposure of LIC and public sector banks to the Adani group, Rahul said, the Hindenburg report had spoken about shell companies in Mauritius. He further stated that given Adani’s sprawling network across strategic sectors, its opacity was an issue of national interest. “Why does the government not question these shell companies? Who are these people, whose money is it?”He said Adani had announced last year that he would invest $ 50 billion to build the world’s largest green hydrogen ecosystem. “And in this Budget, Nirmala Sitharaman announces huge incentives for green hydrogen…Rs 19,700 crore.. which means it will be given to Adani,” he said.
Treasury benches repeatedly interrupted the allegations of Gandhi asking him to authenticate his claims, saying that such allegations cannot be levelled against the Prime Minister without documentary evidence to which Gandhi claimed he would do so. The assertions invited retaliatory political attack from the BJP leaders who recounted the scandals that had rocked the UPA government, with some of them linked to the Gandhi family. Senior BJP leader Ravi Shankar Prasad said Rahul Gandhi was not able to digest India’s development under PM Modi and his attack on the government hurt ‘the credibility of India in the economic world’.
“Gandhi’s speech in the House on Tuesday was echoing frustration, agony, anger and the sense of entitlement,” Prasad said. “We could see the sense of entitlement that the governments have to be run by him, but this Modi came and is ruling this country. And that his party has lost 2014, 2019 and (is) going to lose 2024 also,” Prasad remarked.
Prasad recalled the scams during the UPA regime and alleged that the Congress governments had tried to facilitate Bofors accused Ottavio Quattrocchi’s exit from India and later backed him to clear his accounts in a London bank. Prasad also referred to Gandhi’s brother-in-law Robert Vadra and the alleged land deals he was involved in.
Parliamentary Affairs Minister Pralhad Joshi accused Gandhi of making statements in the House without basis or documentary evidence. Joshi objected in the House that the Speaker has to take note of the fact that Gandhi had not authenticated the allegations nor had he given any notice to make the allegations. “Those have to be expunged and a privilege notice has to be sent to him,” he demanded. Speaker Om Birla said he would look into it and later he expunged the critical references of Rahul Gandhi against Prime Minister Modi.
The Speaker Om Birla conceded the demand of BJP ministers and expunged Rahul Gandhi’s remarks on Modi-Adani nexus.
In his concluding reply to debates on the motion of thanks to the presidential address, Prime Minister Narendra Modi countered Rahul Gandhi in his unique oratorial style and said,“Those sunk in arrogance feel that their way will come out by abusing Modi. The way will emerge through mudslinging of false allegations on Modi. The country’s faith in Modi has not been built by newspaper headlines or by gleaming faces on TV.” He said the trust the nation had in him is something “beyond” the Opposition’s understanding.
Taking a dig at the allegation that agencies overwhelmingly target Opposition leaders, Modi said he thought poll results would foster Opposition unity but it was the Enforcement Directorate that had these people come together on a common platform. Criticising what he called was an attempt to insult him, “After some people’s remarks yesterday in Lok Sabha, the entire ecosystem and their supporters were jumping with joy.”
Modi during his 87-minute speech, interrupted by calls of “Adani, Adani,” and “JPC, JPC” from the Opposition, made no direct reference to the allegations made by Gandhi regarding the Adani group. He invoked the UPA years and listed the scams that had riddled them. Terming the 2004-2014 “the lost decade,” Modi remarked that the UPA had a tendency for converting every opportunity into a misfortune. So the I-T boom got enmeshed in the 2G scam, the India-US nuclear deal in the cash-for-vote scandal, the energy blackout with the coal scam.
In his speech, he mainly cited the achievements of his flagship schemes. “Will the 80 crore countrymen getting free ration believe them ever?,” he asked. “Their abuses and allegations will have to pass through those crores of Indians whom they had forced to live in trouble for decades,” he said, without going into details of the allegations by Gandhi.
SC seeks Centre, SEBI views on improving the regulatory mechanism
Expressing concerns about protecting Indian investors in the wake of the Adani-Hindenburg issue, the Supreme Court has sought the views of the Centre and the Securities and Exchange Board of India (SEBI) on improving the regulatory mechanism.
The bench headed by Chief Justice of India DY Chandrachud also proposed the constitution of a committee to give suggestions on strengthening the regulatory framework to safeguard the interests of shareholders. The bench, which also comprised Justices PS Narasimha and JB Pardiwala, was hearing two public interest petitions which sought a probe into the report of a US-based short-selling firm, Hindenburg Research, which accused the Adani Group of stock manipulation and accounting fraud. The conglomerate has denied the charges.
However, Hindenburg’s accusations upset investors, with shares of listed firms of the conglomerate losing over USD 100 billion in value.
