The Adani Group controversy: Modi’s silence on Rahul’s questions says a lot

For three days in a row, India’s parliament debated allegations by US-based short-selling firm Hindenburg Research that Gautam Adani’s power-to-port conglomerate Adani Group manipulated the stock market to inflate share prices.

The share price of Adani Group has been falling continuously since January 25th; trillions of rupees have disappeared from the stock markets.

And raising all these topics, the Congress party’s member of the Parliament (MP) Rahul Gandhi raised a series of questions in the Parliament regarding Adani’s alleged ties with Prime Minister Narendra Modi and the ruling Bharatiya Janata Party (BJP).

These questions have irked the ruling BJP, within and outside the parliament. Modi responded to the allegations two days in a row but chose to remain mum on the main allegation of his ties with the Adani Group and its founder-chairman.

In the controversy surrounding the Adani Group, the Congress party, the Trinamool Congress (TMC), and the Left parties have repeatedly alleged that the conglomerate, allegedly patronised by Modi and his BJP, has established a monopoly over India’s state assets and various industries since 2014.

While the BJP has repeatedly denied its ties to the Adani Group, the opposition parties had plucked past incidents to show how Mr Adani rose from nothing to become a top local capitalist when Modi was Gujarat’s chief minister.

It has also been alleged that Modi paved the way for Mr Adani’s rise by handing over land for Mundra port to his company at a throwaway price. But earlier, both Mr Adani and Modi rejected this allegation.

Although journalists like Paranjay Guthakurta and Ravi Nair had to come under the fire of the government and the Adani Group due to their investigative reports on the nexus between the ruling clique and the conglomerate, the investors didn’t exhibit any mass panic in the way they reacted after the publication of the Hindenburg Research’s investigative report on the conglomerate.

Since Hindenburg Research is a foreign institution, the Adani Group must gain momentum. Some people close to the BJP have also filed a public interest litigation against Hindenburg Research in the Indian Supreme Court. At the same time, despite threatening to sue the short seller, the Adani Group didn’t take any step in that direction, except for hiring a US law firm.

It’s understood that as the Adani Group had skipped answering the crucial questions Hindenburg Research raised in their report, suing the latter would force the conglomerate to answer such questions in an American court, which could cause further ignominy.

The Adani Group reportedly acted against media houses that reported against it. It’s reported that the conglomerate unapologetically curtailed the freedom of the press by suing media houses, alleging defamation, in Ahmedabad-based courts.

Gandhi’s question on the Adani Group controversy

Gandhi asked crucial questions regarding the ‘nexus’ between Modi and the Adani Group. The crux of the question is the allegations levelled against Mr Adani and his Adani Group’s nexus with the prime minister and the BJP.

On Tuesday, February 7th, Gandhi posed five questions to Modi. He wanted to know the following:

“How many times have you (Modi) travelled abroad with Adani (Adani group chief Gautam Adani)?”

“How many times has Adani (Gautam) accompanied you (Modi) on your journeys (abroad)?”

“How many times has Adani (Gautam) followed you (Modi) to a foreign country?”

“Of all the countries you (Modi) have visited, how many have signed contracts with Adani?”

“How much money has Adani donated to the BJP in the last 20 years through electoral bonds?”

Modi’s ironical response to the Adani controversy

Naturally, Gandhi’s questions on the Adani Group and comments in the Parliament about Modi’s direct relationship with Mr Adani irked the ruling party. It is reported Modi didn’t attend the Lok Sabha session, apparently to avoid humiliation, on Tuesday, but he watched Mr Gandhi’s speech on television.

With much fanfare, the BJP declared Modi would lambast Gandhi in the parliament on the Adani controversy. On two consecutive days, Wednesday, February 8th, and Thursday, February 9th, Modi addressed the Lok Sabha and Rajya Sabha—the upper and lower houses—respectively.

According to the BJP, Modi made the Congress party extremely uncomfortable with his speech.

But Modi did not mention the name of the Congress party MP Gandhi directly, nor did he utter Adani’s name in his response in the Lok Sabha and Rajya Sabha on Wednesday and Thursday.

Instead, in his response to the Lok Sabha, he said on Wednesday that under his government, millions had got welfare benefits, which, he claimed, they had never received before. He attacked the Congress party and said that Harvard University has been researching the grand old party’s decimation in the Indian polity.

In the Lok Sabha, Modi trumpeted the achievements of his government, which have been widely criticised so far by the Opposition and some media outlets that are not apparently servile to the government. Modi repeatedly tried to portray himself as the sole crusader against the Opposition, whom he presented as an evil force working against India’s so-called ‘progress’.

On Thursday, Modi again pointed the finger at the Congress party during his speech in the Rajya Sabha. He talked about how former prime minister Indira Gandhi repeatedly used Article 356 of the constitution to dissolve opposition-ruled state governments.

Modi questioned why members of the Gandhi family (Indira Gandhi’s daughter-in-law Sonia Gandhi and her children, Rahul and Priyanka Gandhi) do not use the surname of the country’s first prime minister, Jawaharlal Nehru.

Although he questioned the Gandhis on not using the surname of Nehru, Modi did not explain why Feroze Gandhi’s (former MP, journalist, and husband of Indira Gandhi) successors and family members would suddenly use the surname of Nehru, who was Indira’s father.

Moreover, Modi remained mum on why Indira’s grandson, Varun Gandhi, a BJP MP, and his mother, Maneka Gandhi (widow of Sanjay Gandhi), do not use the Nehru surname. Although they come from the same family, they don’t face the vitriol the other Gandhi family members face under Modi’s rule.

Modi’s ‘response’ omits the controversy around the Adani Group

While BJP MPs have been exuberant about Modi’s response to the allegations against his government and claimed that Modi had stunned Gandhi, both responses have glossed over the fact that Modi evaded the key questions raised by Rahul.

There have been allegations regarding the Modi government’s purported ties with the Adani Group for a long time. Mr Adani and Modi were found travelling together in the past; Modi even rode a chartered aircraft owned by the Adani Group during election campaigns.

Apart from this, before 2014, with the joint support of the Congress party and the BJP, Mr Adani became the 104th richest person in the world, from zero in the 1990s. However, it’s alleged that during Modi’s reign, Mr Adani became the third richest person in the world after receiving gas, ports, airports, electricity supply and mining contracts.

Recently, during an interview with a television anchor reportedly inclined towards the Hindutva camp, Mr Adani claimed that his conglomerate has managed to bag all deals through the proper process by submitting tenders. He asserted that the conglomerate didn’t receive any special favours from the Modi regime.

So far, the BJP has been unofficially claiming that the Adani-led conglomerate managed to bag all deals by filing tenders. The BJP asserts that as no competitors ever contested the decision to award the contract to the conglomerate, it proves that the process is transparent, sans any corruption.

Hindenburg Research’s investigation revealed that the Adani Group had manipulated its stock prices by forming shell companies in tax havens and used them to invest in its stocks to inflate their prices. The conglomerate then mortgaged its shares at public sector banks to get loans against them. It’s not clear whether the conglomerate had manipulated the tender process similarly.

State Bank of India (SBI) and Life Insurance Corporation (LIC), among the government institutions, have invested a large part of their assets in Adani Group shares, and these institutions have also suffered heavily as the conglomerate’s share prices nosedived after the Hindenburg Research’s investigation report was released.

Although the Adani Group lost trillions of rupees in the stock markets, the small investors and the public money deposited at these financial institutions also ebbed away. This caused massive panic in the country.

Now the question is, would the Adani Group have received investments from the public sector units like SBI or LIC without the active support of the Modi government? Without the government’s cooperation, could they have been exempted from the wrath of market regulators and investigative agencies like the Stock Exchange Board of India (SEBI) or the Enforcement Directorate? How the Adani Group became so powerful in the last eight years is also a big question that Gandhi raised in parliament.

Doesn’t Modi’s silence on the Adani Group, despite his proclivity to target the Gandhi-Nehru family, indicate that the BJP must be complicit and the government is silently trying to ignore this huge loss to the common investors and depositors of the country?

Although the Modi government may achieve success in throwing the controversy around the Adani Group to oblivion, the narrative regarding the BJP’s alleged connivance with the conglomerate is public. As more information emerges, it will be hard for the establishment to justify its prejudices. It’s to be seen how the Modi regime does a trapeze walk on this issue.