What Is the Rs 20,000 Crore Figure Rahul Gandhi Spoke of in Adani’s 'Shell Companies'?

A Financial Times report claimed “offshore companies linked to the Adanis” invested at least $2.6 billion in the group between 2017 and 2022. Adani had also called off the Rs 20,000 crore FPO which a Forbes report had claimed was bought into by the group.

New Delhi: A day after being disqualified as Lok Sabha MP following his conviction by a Surat court in a 2019 defamation case, a combative Rahul Gandhi on Saturday claimed that he had been disqualified because Prime Minister Narendra Modi was “scared of my next speech on Adani”.

During a press meet on Saturday, Gandhi insisted that “there is a deep relationship between Narendra Modi ji and Mr Adani” and asked, “There is a question, Rs 20,000 crore have suddenly arrived in Mr Adani’s shell companies, where has this money come from? Some of these companies are defence companies. Whose money is being spent on our drone and missile development? Why is the defence ministry not asking this question?”

Though he did not elaborate, Gandhi’s reference to the specific figure of Rs 20,000 crore resonates with two recent developments related to the group and data analysis on monies coming into the Adani Group.

“Over half” of Adani FDI came from “opaque overseas entities”: FT

An analysis by Financial Times this month, using publicly available financial data from India, concluded that almost half of Adani’s $5.7 billion foreign direct investment (FDI) inflows were from “opaque overseas entities with connections to group”.

The Financial Times, on analysing India’s FDI remittance data, reported that offshore companies “linked to the Adanis” and “bearing funds of unclear provenance” invested almost half of all the FDI that came into the Adani Group of companies. This could be said to amount to “Rs 20,000 crore”, the figure Gandhi mentioned in his press conference.

The London-based financial daily had also written in its report about the “the role of hard-to-scrutinise money flows in financing the Indian tycoon’s business empire”. It added that Adani had aligned himself “with Prime Minister Narendra Modi’s development agenda”.

The report had also stated that these “offshore companies linked to the Adanis” invested at least $2.6 billion in the group between 2017 and 2022, which was 45.4% of the more than $5.7 billion it received in total FDI over the period.

The analysis concluded that the total amount of opaque overseas investments in Adani companies was an underestimation and the actual value will be higher since official FDI numbers in India exclude foreign portfolio investments, “which fall under a different reporting regime”, and also investments in listed companies amounting to less than 10% of their paid-up capital.

Aborted Adani FPO: Rs 20,000 crore

Adani Enterprises had raised Rs 20,000 crore (US$2.5 billion) through a fully subscribed follow-on public offer (FPO) in late January. However, as reported by The Wire, it subsequently called off the FPO as it faced market volatility in the wake of allegations that the parent company Adani Group was involved in stock manipulation and accounting fraud.

The Adani Group had then said in a statement, “Given the unprecedented situation and the current market volatility, the company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction.”

Forbes magazine has also reported on what it said was “evidence the Adani Group likely bought into” the $2.5 billion share sale. The involvement of Elara Capital and Monarch Networth Capital – two entities that Hindenburg Research had alleged were linked to Adani – in the share sale “raises questions about whether any of Adani’s personal funds were deployed to help meet the $2.5 billion target”, the business magazine wrote.

“The only way Adani can actually resolve this issue is to illustrate who did buy all of the shares. It would be my speculation that there were insiders,” the report had quoted Tim Buckley, a former investment banker at Citigroup and director at Australia-based Climate Energy Finance, who has been studying the Adani Group for over a decade, as saying.

‘PM is scared of my next speech, which is going to come on Adani’ 

During the press meet, the Congress leader insisted that he has been targeted for raising uncomfortable questions about the saffron party’s relationship with the corporate house.

“Please understand why I have been disqualified. I have been disqualified because the Prime Minister is scared of my next speech. He is scared of the next speech that is going to come on Adani. I have seen it in his eyes. So, he is terrified of the next speech that is going to come and they don’t want that speech to be in Parliament. That is the issue, that is why first the distraction, now the disqualification,” he said.

Following Gandhi’s press conference, BJP leader Ravishankar Prasad addressed the media on the issue where he said: “We don’t have to defend Adani, BJP never defends Adani, but BJP doesn’t target anyone either.”

The BJP claimed that Gandhi has been disqualified in accordance with a Supreme Court ruling. Prasad spoke about the international business deals the Adani group engaged in during the Congress rule from 2004 to 2014 and also about its investments in Congress-ruled states.

PM Modi or the Modi government are yet to reply in Parliament to the substance of the charge of Adani’s proximity to them. Adani has denied that his longstanding connection with the prime minister has led to preferential treatment.