THE ADANI STORY
Making of the world’s second richest man
Either you sit on the pile of cash, or you continue to grow. - Gautam Adani
Who is Adani?
Gautam Shantilal Adani is a billionaire Indian industrialist who is the chairman and founder of the Adani Group. According to Forbes, his family's net worth is estimated to be around US$25.2 billion as of October 2020. He is the second richest man in India, a spot he attained in 2019. In 2019, he was ranked as the third most powerful person in India.
Founded in 1988 by Gautam Adani, Adani Group is an Indian multinational conglomerate company headquartered in Ahmedabad, Gujarat. It was started as a commodity trading business, with the flagship company Adani Enterprises Limited. The Group's varied businesses include energy, resources, logistics, agribusiness, real estate, financial services, defence and aerospace. The group operates at 70 locations in 50 countries and is India's largest port developer and operator with ten ports and terminals including Mundra Port. The Group also co-owns India's largest edible oil brand, Fortune in a joint venture with Wilmar International.
Adani and his controversies
Adani was embroiled in various controversies during the 2014 Loksabha elections. There were accusations of him supporting/ funding the campaign led by Narendra Modi for Bharatiya Janata Party. Even though he claimed he had no special favours with Modi; Modi was seen traveling on Adani group’s chartered planes to rallies across India.
In an interview to CNBC, Adani clarified that BJP paid market price to Adani Group for using its aviation services.
It was also alleged that the NDA government favoured Adani by waiving ₹ 200 crore fine on Adani Port and SEZ. In an interview, Adani denied all the allegations and claimed that no favours were extended to him or his company and that the fine had not been dropped. Furthermore, he said that the Rajasthan Government owned the mine, and Adani Group was just the mine contractor.
Instances of Adani Group violating laws in India-
In 2011- After a three‐year investigation, the ombudsman of Karnataka found them to have been actively involved in the large‐scale illegal export of iron ore. They further recommended that AEL should be stripped of its rights to operate the port and banned from further business dealings with the government.
August 2016- The National Green Tribunal fined Adani nearly ₹ 5 crore for its role in chartering an unseaworthy ship to transport coal. The tribunal discovered that the ship had sunk, spilling oil and over 60,000 tons of coal. This caused extreme environmental damage as it destroyed mangroves and polluted beaches.
January 2016- The National Green Tribunal fined Adani Hazira Port Private Ltd. almost ₹ 25 crore for undertaking development works at its port in Hajira, without an environmental permit. The tribunal found that these works destroyed mangroves and impeded the fishing activities of local communities by interfering with their access to the river and ocean.
The developmental activities by the Adani Group of a huge port and one of the world’s largest coal‐fired power plants has caused significant harm to the environment and local communities.
At various instances, they have failed to comply with regulations and permits, and were criticized for having an “irresponsible attitude” and for failing to care about any “adverse impact of its development on the environment.”
The Carmichael Coal mine
In 2010, Adani Private Ltd. proposed the Carmichael Coal mine. The proposed coal mine would have been one of the largest coal mines in the world. But it faced a lot of backlash as many objected, citing ethical and environmental concerns. The project has been a subject of many lawsuits and protests.
It is claimed that the mine would cause a lot of damage to the already ailing environment. It would lead to water drainage and carbon emission which further result into increased global warming and climate change which is ultimately worse for the already degraded environment.
These coal mines would be a step back for Australia and India when the developed nations of the world are increasingly investing and shifting to renewable and non-polluting sources of energy. It shall also undermine the global movement of actively reducing carbon emissions.
During its limited time in Australia, The Adani Group has already violated certain laws. These include:
1. Breached a pollution license by 800%- This allowed polluted, coal-laden water to spew out of its Abbot Point coal terminal and into the Great Barrier Reef World Heritage Area.
2. Caught red-handed illegally starting work at the Carmichael mine site- They further lied to the Queensland Government about the same. Adani illegally cleared swathes of vegetation and drilled bores into aquifers of the Great Artesian Basin — putting groundwater at risk.
3. Guilty of exaggerating the benefits of their coal project – They also admitted it would create 1464 jobs, not the 10,000 promised and $4.8 billion not $22 billion in royalties.
The violation of laws doesn’t stop at Australia. The CEO managing the Adani Group in the past has pleaded guilty of allowing a flood of toxic pollutants to flow into a major river, poisoning local water sources and killing crops in Zambia.There are also reports that suggest The Adani Group is using tax havens in the Cayman Islands.
In India, the Adani Group has been found guilty on grounds of financial fraud and violation of environmental laws.
Stop Adani Movement
This is a wave of global protests that recently gained momentum when Time's Person of the year 2020, Greta Thunberg who called for stopping operations of the mine and criticized companies siding with Adani. Adani’s Carmichael project in Australia received extreme scrutiny from Greta Thunberg and other environmental activists. The project in the Galilee Basin of Queensland is facing fresh attacks from environmentalists as Australia suffers catastrophic bushfires that have killed 28 people and caused massive devastation to wildlife and the environment.
Amidst this came a criminal case filed by The Central Bureau of Investigation (CBI) against Adani Enterprises Ltd for colluding with officials of the National Cooperative Consumers’ Federation (NCCF) to unfairly win a contract for supplying coal to an Andhra Pradesh government-owned company. In the FIR, India’s federal investigation agency alleged that Singh and Gupta favoured Ahmedabad-based Adani Enterprises in getting the contract when Andhra Pradesh Power Generation Corp. Ltd floated the tender in 2010 for the supply of 600,000 tonnes of coal.
CBI, which is likely to soon issue summons to those named in the FIR, has further alleged that Adani Enterprises gave an unsecured loan of ₹16.81 crore to Vyom Trade Links in 2008-09. Bank guarantees of Adani Enterprises and Vyom Trade Links were also issued by “the same branch of the State Bank of India and at the same time”
What happens next?
In June 2019, the Adani Group received permits required to start operations. They are yet to get a permit for extracting the mine. However, the low funding pushed them to begin the operations on a smaller scale than anticipated.
The coal prices which were presenting a decreasing trend are predicted to increase in 2020. Using this to their benefit, the Group aims to start exporting coal by next year. Despite the positive changes, the future of the coal mine remains sad as the profitability has lowered and many have called the project a risky one.
The protest has been continued for years with no signs of stopping, casting even more doubts on its future.
➢ Wikipedia- Adani