New Orleans Gautam Adani, principal of the India-based Adani Group, has won the controversial bid to redevelop the Dharavi megaslum in the heart of Mumbai. Once the third-richest man on the planet, his wealth has capsized under scrutiny of US-based analysts that questioned his company’s financial schemes because of the accounting between related Adani subsidiaries in offshore shell companies. As long as his troubles continue, clouds continue to gather over the Dharavi redevelopment and demands for better and more equitable relocation and support for continued residence and livelihood.
The latest shoe to drop is a hard-hitting piece in the London Review of Books entitled “The Big Con: Pankaj Mishra on Modi’s India and the New World Order.” The article documents a litany of troubles for Adani and what they call his “floundering flagship business, Adani Enterprises.” He had to cancel a $2.5 billion stock sale. His social media feed has gone silent. Former British Prime Minister Boris Johnson’s brother, “abruptly resigned from Elara Capital, a UK investment firm that, according to the Hindenburg Research, is complicit in the Adani Group’s practice of inflating stock prices through shell companies in Mauritius.” Norway’s largest pension fund “abandoned all its shares in Adani Green Energy Ld.” This isn’t just smoke, but seems to be coming from a forest fire. The article continues in this vein, reporting,
France’s TotalEnergies, Adani’s largest European collaborator and the main source of his credibility among foreign investors, has put a green hydrogen partnership with him on hold. The asset management unit of J.P.Morgan Chase has, in Bloomberg’s words, ‘wiped its ESG portfolios clean of their exposure to the Adani empire’. Bangladesh, which had agreed to pay dramatically high prices for electricity from Adani’s tax-free coal-fired power station in India, is now asking to renegotiate.
This stench of burning is likely to mean a fire sale of Adani assets, that is unless the Indian government under Prime Minister Narendra Modi can prop him up and that is the rest of this sad story. The “con” alluded to in the title of this piece centers on cronyism in the relationship between Adani and Modi, which arguably is infecting the Indian economy. Modi’s role in forcing a renewable energy project in Sri Lanka to Adani led to the resignation in disgrace of the head of the country’s largest electricity board. Modi greased the wheels for Adani to open a huge coal mine with the Australian government, and then facilitated a massive loan from India’s biggest bank to make it all come together. It just goes on and on.
Adani isn’t the only beneficiary of Modi’s brand of crony capitalism, just the biggest. Others have flourished as well.
The Economist estimates that the share of wealth held by billionaires in India that derives from cronyism has risen from 29 percent to 43 percent in six years. According to a recent Oxfam report, India’s richest 1 per cent owned more than 40.5 per cent of its total wealth in 2021 – such statistics are more often associated with the notorious oligarchies of Russia and Latin America. The new Indian plutocracy owes its swift ascent to Modi, who audaciously clarified the quid pro quo. Under the ‘electoral bond’ scheme he introduced in 2017, any business or special interest group can give unlimited sums of money to his party and keep the transaction hidden from public scrutiny.
Given the wreck and ruin of these kinds of horrific policies benefiting the rich, while the number of Indians “who go to sleep hungry rose from 190 million in 2018 to 350 million in 2022”, maybe it seems parochial to wring our hands about the fate of a million people in Dharavi that stand to be hurt in the slipstream of such disastrous insider deals, but the Adani Group is at ACORN’s doorstep, so we’re forced to try and clean the mess where we find it.