In a surprising turn of events, Kenyan President William Ruto has cancelled two major deals with India's Adani Group after its founder was indicted in the US for corruption. The deals, worth nearly $2 billion, included a 30-year lease for control of the country's main airport and a partnership to construct power transmission lines. Ruto cited "new information" from investigative agencies and partner nations as the reason for the cancellation, drawing thunderous applause from lawmakers in his state of the nation address. The move has sparked concerns about transparency and value for money in these deals, which have faced criticism from politicians and the public.
Adani Group's Deals in Kenya Canceled Amid Corruption Allegations
Kenyan President William Ruto has swiftly revoked two major deals with the India-based Adani Group after allegations of corruption emerged against its founder, Gautam Adani. The canceled agreements, totaling nearly $2 billion, aimed to grant Adani control of the nation's primary airport for 30 years and build power transmission lines.
Background:
The Adani Group is a multinational conglomerate with interests in various industries, including energy, infrastructure, and ports. It has been seeking to expand its presence in Africa, and Kenya has emerged as a key target market. In July 2022, Adani signed a deal with Kenya Airways to establish a joint venture for cargo handling at Jomo Kenyatta International Airport.
However, the Group's reputation came under severe scrutiny in January 2023 when Hindenburg Research, a short-selling firm, accused Adani of engaging in accounting fraud, stock manipulation, and money laundering. The allegations sent Adani's stocks plummeting and sparked a global investigation into his company's practices.
Cancellation of Deals:
In a televised address on February 13, 2023, President Ruto announced the cancellation of both Adani Group deals. He stated that the decision was based on "new information" provided by investigative agencies and partner nations, alluding to the ongoing corruption probe against Adani.
The move sent shockwaves through Kenya's political and business circles. Adani Group expressed its disappointment and stated that it was "evaluating its options."
Concerns and Criticism:
The cancelation of the Adani Group deals has raised concerns about transparency and value for money in Kenya's infrastructure projects. Critics argue that the government should have conducted due diligence before signing the agreements and that the deals were not subject to competitive bidding.
Moreover, there are fears that the cancellation could discourage other foreign investors from doing business in Kenya. The Adani Group is a major player in the global infrastructure sector, and its departure could potentially harm the country's economic development plans.
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