Kenya Cancels $736 Million Adani Power Deal Amid US Bribery Scandal

US Bribery Scandal: Kenyan President William Ruto has announced the cancellation of a $736 million power transmission deal with India’s Adani Group following allegations of bribery and fraud linked to the conglomerate in the United States. The decision also affects a proposed airport expansion project, marking a significant blow to the group’s operations in Kenya.

The announcement came during Ruto’s State of the Nation address, where he cited “new information provided by investigative agencies and partner nations” as the basis for his directive. “I have instructed the ministries of transport, energy, and petroleum to immediately terminate the ongoing procurement processes related to these projects,” Ruto stated, signaling a robust stance on corruption and governance.

Adani Group’s Troubles Deepen

Adani Energy Solutions had inked a 30-year public-private partnership with the Kenya Electrical Transmission Company in October to develop power transmission lines. However, the contract was suspended by a Kenyan court shortly after, raising questions about the deal’s transparency.

The US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) recently unveiled an indictment accusing Adani Group chairman Gautam Adani and seven others of orchestrating a bribery scheme worth over $265 million. The scheme allegedly targeted Indian government officials to secure renewable energy contracts, with some funds raised through a $750 million bond offering, including $175 million from US investors.

According to US prosecutors, the offering contained misleading statements about Adani Green’s anti-corruption policies, creating a major credibility issue. Adani, 62, now faces charges including securities fraud and wire fraud in New York, though the group has denied all allegations.

Economic Impact

The fallout from the scandal has hit Adani Group hard. Gautam Adani’s net worth plummeted by over $10.5 billion on November 21, 2024, reducing his fortune to $59.3 billion, according to the Forbes Real-Time Billionaire Index. Stocks of flagship firms like Adani Enterprises and other group entities nosedived, hitting lower circuits during early trading.

Despite the turmoil, Adani Group issued a statement asserting its innocence. “The allegations made by the US DOJ and SEC are baseless and strongly denied. We remain steadfast in upholding the highest standards of governance and compliance across all jurisdictions,” the group said.

Kenya’s Stance on Corruption

President Ruto’s decision underscores Kenya’s commitment to transparency and accountability in its development projects. While Energy Minister Opiyo Wandayi had earlier defended the transmission line contract, asserting no evidence of bribery or corruption, the President’s move reflects Kenya’s zero-tolerance policy for unethical practices.

This incident also highlights the increasing scrutiny global companies face as countries tighten anti-corruption frameworks. Kenya’s cancellation of the Adani contracts not only sends a strong signal about governance but also emphasizes the importance of ethical conduct in international business deals.

What Lies Ahead?

The scandal has sparked significant debate in business and political circles globally. With the US DOJ’s ongoing investigation and the Kenyan government’s decisive actions, the Adani Group faces one of the most challenging periods in its history. The outcome of these legal battles could reshape the group’s global ambitions and influence investor confidence in its projects worldwide.

For Kenya, this development serves as an opportunity to re-evaluate its partnerships and reinforce its stance as a destination for clean, transparent investments.