Kenya cancels proposed power transmission deal with Adani Group following US bribery indictment scandal

Kenyan President William Ruto announced on Thursday, November 21, the cancellation of a proposed power transmission deal with Adani Group due to a recent US bribery indictment scandal involving the company's chairman. The decision also includes terminating a $700 million agreement with Adani to construct power transmission lines in Kenya.

President Ruto stated, "I have directed agencies within the ministry of transport and within the ministry of energy and petroleum to immediately cancel the ongoing procurement," citing new information provided by investigative agencies and partner nations.

In October, Adani Energy Solutions signed a 30-year, $736 million public-private partnership with the Kenya Electrical Transmission Company. However, the contract was suspended by a court in the same month.

US authorities revealed that Gautam Adani, one of the world's richest individuals, and seven other defendants agreed to pay approximately $265 million in bribes to Indian government officials to secure solar energy contracts. This included misleading investors during a $750 million bond offering, which raised about $175 million from US investors. The US Securities and Exchange Commission stated that the offering materials contained false or misleading statements about Adani Green's anti-corruption and anti-bribery efforts.

The indictment, unsealed by federal prosecutors in New York, charged Adani with securities fraud, conspiracy to commit securities fraud, and wire fraud. Consequently, the Adani Group decided not to proceed with a proposed US dollar-denominated bond offering. The US Department of Justice emphasized that the charges are allegations, and the defendants are presumed innocent until proven guilty.

Adani Group denied the allegations, stating it would seek "all possible legal recourse." The group asserted, "The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied. The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency, and regulatory compliance across all jurisdictions of its operations."

The scandal has had significant financial repercussions for Adani. On November 21, 2024, Gautam Adani's net worth plunged by over $10.5 billion, or nearly ₹88,726 crore. According to the Forbes Real-Time Billionaire Index, his net worth now stands at $59.3 billion. The bribery scandal led to a sharp decline in Adani Group stocks, with several shares hitting their lower circuits in early trade.

Earlier, Kenyan Energy Minister Opiyo Wandayi had stated there was no bribery or corruption involved in awarding the transmission lines contract. However, the recent developments and the president's directive indicate a significant shift in Kenya's stance following the US indictment.