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Is Adani being targeted because he is part of the New India story?

A port managed by the Adani Group (Image courtesy: @Adaniport)

Gautam Adani, the billionaire industrialist and promoter of the Adani Group of companies has always been treated with suspicion especially since his meteoric rise in the last few years. He recently grabbed headlines after he acquired television news channel, NDTV and now with the acquisition of the strategically located Haifa port in Israel, which will give India access to Europe.

The busy port handles shipping containers as well as tourist cruise ships.

Israeli Prime Minister Benjamin Netanyahu described it as an “enormous milestone.” The Adani Group won after it outbid two companies—one Chinese and the other Turkish.

In the Mediterranean, Adani has also evinced interest in investing in Egypt’s ports and airports. He met Egyptian President Abdel-Fattah El-Sisi during his trip to New Delhi to discuss possible investment plans. Besides ports and airports, he also showed interest in investing in renewable energy and green hydrogen.

The Adani Group has sizeable investments in renewable energies. It is focusing on its wind-generated power capabilities to an extent that it expects it to be the world’s largest renewable power-generating company by 2030.

The Adani Ports and Special Economic Zone Limited (APSEZ Ltd.), which started operations in 1998, is now India’s largest private port operator providing end-to-end logistics support.

“Our 13 strategically located ports and terminals represent 24 per cent of the country’s port capacity, demonstrating our vision that when it comes to servicing core national needs, Adani Ports is prepared with scale, scope and speed,” the APSEZ Ltd website reads.

It owns Mundra Port, Hazira Port, Dahej Port in Gujarat, Dhamra Port in Odisha, Mormugao in Goa among others.

Under the Adani umbrella, it has seven traded companies– Adani Enterprises- its flagship brand, Adani Green Energy, Adani Transmission, Adani Total Gas, Adani Power, Adani Wilmar besides APSEZ Ltd with more than 23,000 people employees.

So, is Adani being targeted because of his seminal role in the rise of a New India, especially its global outreach and focus on futuristic green energy?

Bloomberg, in a report said If Adani didn’t exist, the Indian government would have had to invent him: The development model we have now chosen requires risk-taking “national champions” such as the Adani Group.

It further noted that the “public sector is too inefficient to build what India needs; the rest of the private sector is too concerned about political risk.”

While traditionally Indians have been tuned to hate industrialists, Adani is also perceived to be close to Prime Minister Narendra Modi.

Analysts however said that the Adani episode may not have any impact on the Indian economy or even the stock market even as the ongoing Parliament session has seen major protests from the Opposition members. According to Guardian, “so far, there is no sign the fracas is spreading across India’s financial sector and the protests are more a reflection of political theater rather than spontaneous public outrage.”

“Adani is perceived to be the poster boy of the current government due to the surge in his investments and expansion. But governments need the private sector to partner them in economic development. While the Hindenburg report needs to be taken up and regulators must do the needful, many see Adani’s fall as Modi’s fall,” a government insider said.

Following short seller Hindenburg’s accusation of Adani Group’s gross manipulation of the stock market and brazen accounting fraud, Adani Enterprises’ Rs 20,000 crore follow-on public offer was withdrawn despite being fully subscribed.

The role of private sector in a nation’s economy

The private sector plays a critical role in any country’s economic journey. India is no exception. While the various economic regulators need to have fool-proof guidelines and monitoring teeth to ensure there are no manipulation or discrepancies in functioning, the ecosystem needs to be pro-business.

When the Congress-led UPA was in power, the story was no different.

Presenting the UPA government’s first budget then Finance Minister P Chidambaram underlined the need for investments both private and public for economic growth. “I believe that the key to growth is investment – public and private, domestic and foreign. It is therefore my intention to considerably enhance investment in all sectors of the economy,” he said. Through his tenure as finance minister he stressed on the importance of the private sector in nation building.

While the Hindenburg allegations as well as motivations need to be investigated thoroughly for bringing back investor confidence and credibility of India’s regulatory arms, the virulence with which the opposition attacks Modi raises suspicions about its possible linkages with powerful puppeteers living outside the country who are viscerally opposed to a strong, sovereign and civilizational India.

Also read: Adani Enterprises withdraws its Rs 20,000 crore FPO

Adani Group commissions new 450 MW wind-solar hybrid power plant in Rajasthan