Once trumpeted as the epitome of corporate success in India, Adani Group, owned by billionaire Gautam Adani, has now been embroiled in controversy.
With bribery charges in the United States to deal with, the financial and reputational damage is critical, raising serious questions over its biggest projects abroad, including those in Sri Lanka.
A US case against Gautam Adani and other executives accuses him of orchestrating a $250 million bribery scheme, in exchange for contracts, which would eventually yield $2 billion in profits over 20 years for the renewable power firm Adani Green Energy.
Since the allegations, Adani Group has lost more than $55 billion in market value, with Adani Green Energy alone losing $9.7 billion. The legal troubles add to earlier accusations by Hindenburg Research in 2023, which had pointed to stock manipulation and accounting fraud.
Sri Lanka, where Adani is involved in the Colombo Port terminal and the Mannar wind power project, is now caught in the crossfire.
The Colombo Port project, initially financed by the U.S. International Development Finance Corporation (DFC), is under review due to the bribery allegations.
Meanwhile, Adani’s $442 million investment in the Mannar wind power project has faced persistent criticism.
Opposition parties say that the project was given without open tenders and accuse Indian Prime Minister Narendra Modi of undue influence on then-Sri Lankan President Gotabaya Rajapaksa.
The resignation of a high-ranking official at the Ceylon Electricity Board, after making the same accusation, further fanned public scepticism.
But despite these controversies, the Wickremesinghe administration pushed ahead, confident in the project’s government-to-government nature. Former Foreign Minister Ali Sabry defended the partnership as transparent, citing feasibility studies and support from India.
But corruption watchdogs and critics question the wisdom of collaborating with a company facing serious allegations, warning it could harm Sri Lanka’s international reputation and deter other investors.
With the new administration led by President Anura Kumara Dissanayake, there is greater political pressure to review some large contracts.
Dissanayake’s administration has promised to root out corruption and ensure transparency. Minister Nalinda Jayatissa last week said the government needed to assess the impact of the U.S. indictment on Adani projects in Sri Lanka – a message of caution without any firm commitments to act.
Public discontent over the lack of transparency in these deals is growing, with activists and experts urging a thorough review of Adani’s investments. Nishan De Mel of Verité Research has called for Sri Lanka to avoid repeating past mistakes and ensure that foreign investments align with national interests and integrity.
As the Adani Group navigates its legal and financial challenges, Sri Lanka is at a very important juncture: to go ahead with these projects or to keep away from a tainted partner.
The government has to balance economic opportunities with the risks of association, ensuring transparency and accountability for the welfare of its people in safeguarding the future of the country.
