Sri Lanka says Adani Port Project to continue despite US charges

Indian conglomerate Adani Group’s port project in Sri Lanka will go ahead despite US charges against its founder and sudden changes to its financing, the island nation said Friday.

A bombshell indictment in New York last month accused billionaire tycoon Gautam Adani and several colleagues of deliberately misleading international investors as part of a bribery scheme.

The charges sent Adani stocks into freefall and again raised questions over corporate governance at the family firm, whose founder is considered a close ally of Indian Prime Minister Narendra Modi.

But Sri Lankan ports minister Bimal Ratnayake said the allegations against Adani had no bearing on the deep-sea container terminal project in the capital Colombo.

“The problem between Adani and the US... is not our concern,” he told reporters during a tour of the port on Thursday night.

“It is of high importance for us that western container terminal development by Adani goes ahead.”

Ratnayake said the project was necessary to generate revenue for the ailing Sri Lankan economy, still teetering after an unprecedented crisis and foreign debt default in 2022.

The port project has an estimated cost of $700 million and is located next to a similar Chinese-run facility.

Ratnayake’s comments came days after Adani Group withdrew its request for a US government-backed loan of $553 million in the wake of the New York indictment.

The loan agreement with the US International Development Finance Corporation (DFC) was finalised last year, with the project seen at the time as a means of countering Beijing’s rising influence in the Indian Ocean.

Sri Lanka sits astride the world’s busiest shipping route, which links the Middle East and East Asia, giving its maritime assets strategic importance.

Adani Group has said it will now finance the project from its own coffers.

Sri Lanka opened an investigation into the conglomerate’s local projects, including the port and a $442 million wind power deal in the island’s north, after last month’s indictment.

New leftist President Anura Kumara Dissanayake campaigned against the wind project before his landslide election win in November, and Ratnayake said his government remained opposed to it.

“It would be disadvantageous to the country,” Ratnayake added.

Dissanayake had dubbed the project a threat to Sri Lanka’s energy sovereignty.

Adani Group said it had lost almost $55 billion in a stock market rout since the indictment, in which US prosecutors accused its founder and other senior officials of bribing Indian government officials.

With a business empire spanning coal, airports, cement and media, Adani Group has weathered previous corporate fraud allegations and suffered a similar stock rout last year.

The conglomerate saw $150 billion wiped from its market value in 2023 after a report by short-seller Hindenburg Research accused it of “brazen” corporate fraud. 

Source: AFP

--Agencies