Thursday Dec 12, 2024
Thursday Dec 12, 2024
Thursday, 12 December 2024 00:28 - - {{hitsCtrl.values.hits}}
Adani Ports and Special Economic Zone (APSEZ) Ltd. has withdrawn from a $ 553 million loan pact with the US International Development Finance Corporation (DFC) to develop a port terminal in Sri Lanka’s capital Colombo.
It announced the move via a filing to India’s National Stock Exchange (NSE).
APSEZ said, “CWIT project in Sri Lanka is progressing well and is on track for commissioning by early next year. The project will be financed through the company’s internal accruals and capital management plan. We have withdrawn our request for financing from the DFC.”
In the exchange filing, the APSEZ did not explicitly mention the reason behind opting out of the $ 553 million DFC investment.
But it was indicative that the decision had to do with the recent US indictment against Adani group officials, including Gautam Adani himself, according to a report in Business Standard.
It said last month, the US Department of Justice and Securities and Exchange Commission indicted Gautam Adani, his nephew Sagar Adani, and six others for allegedly paying $ 265 million in bribes to unknown Indian government officials for securing solar power contracts with state electricity distribution companies. They are accused of disguising these bribes as ‘development fees’ and making false statements to US investors about their anti-bribery practices, thereby raising over $ 3 billion between 2021 and 2024.
Even as the Adani group denied all charges as baseless, the DFC stated that it was reviewing the impact of the allegations and had not disbursed the $ 553 million loan yet.
The US International Development Finance Corporation follows a guideline that ensures its investments comply with ethical standards and US laws, including the Foreign Corrupt Practices Act (FCPA). According to a DFC report to US Congress in June 2022, the agency acknowledges the challenges of corruption, especially in developing countries, and emphasises the importance of thorough due diligence to prevent and detect such risks.
If the companies involved in a foreign project are accused of bribery by the Department of Justice (DOJ), the DFC would likely pause or decline the investment until the matter is resolved.
After the charges were made public, key Adani group investors opted out of further investments in the conglomerate. While French energy giant TotalEnergies announced a pause on new investments citing corruption allegations by the US SEC, other investors such as Florida-based GQG Partners expressed their confidence in the group.
