US Fraud Charges Cast Doubt on Major Indian Conglomerate

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Adani Group Faces Fraud Charges: Impacts on Indian Economy and Politics

New Delhi — Nearly two years after allegations by a U.S. investment firm, India's Adani Group is again in focus, now facing serious fraud charges from the United States, raising concerns about the impact on Asia’s third largest economy. These allegations have sparked political uproar, with opposition parties demanding an inquiry into a business tycoon whose $135 billion empire significantly influences the Indian economy.

Gautam Adani, the founder of Adani Group, has been charged in New York with misleading investors by hiding a $250 million scheme allegedly involving bribing Indian officials for solar project contracts. The solar energy plant, run by Adani Energy Green in Gujarat, aims to light millions of homes.

While Adani Group denies the charges, the latest indictment is seen as a major challenge. “It's different when allegations come from the U.S. government,” said Michael Kugelman of the Wilson Center’s South Asia Institute. Adani's rapid rise began in the 1990s with ventures into infrastructure and renewable energy.

Globally, Adani's plans span Australia, Indonesia, and Israel. Recently, he announced a $10 billion investment in U.S. energy projects. However, following the indictment, Kenya canceled $2.5 billion in deals with Adani Group, and Sri Lanka is reviewing contracts for a deep seaport terminal.

Analysts warn that Adani Group's reputation may suffer. “The charges will increase borrowing costs,” noted Shriram Subramanian of InGovern Research Services. However, he believes the group’s strong project execution record is reassuring. Concerns arise over India's foreign investment appeal as New Delhi seeks to attract businesses shifting from China.

The indictment has also intensified scrutiny over Adani Group's growth during Prime Minister Narendra Modi’s rule. Opposition Congress Party leader Rahul Gandhi criticized the government, demanding action against Adani. Parliament sessions have been disrupted, with opposition accusing Modi of undue favoritism.

However, political experts like Nilanjan Mukhopadhyay believe the controversy won't harm Modi's standing, as similar issues have historically not swayed public opinion significantly in India.

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