By: Staff Writer

November 24, Colombo (LNW): Experts have raised concerns about Sri Lanka’s partnership with the Adani Group following fraud charges against its Chairman, Gautam Adani, and seven associates by U.S. federal prosecutors in New York.

The charges have triggered calls for increased scrutiny over the conglomerate’s projects in Sri Lanka, including a significant renewable energy initiative in the country.

Nishan De Mel, Executive Director of Colombo-based think tank Verité Research, emphasized the importance of Sri Lanka guarding against potential corruption.

He cited past cases where corruption involving the country was uncovered abroad, such as the SriLankan Airlines’ aircraft purchase scandal linked to Airbus through a UK investigation and the Pandora Papers, which implicated Sri Lankan politicians and business figures.

The recent news of alleged fraud involving the Adani Group has led to widespread concern among Sri Lankan citizens and activists, who have taken to social media to demand greater oversight of the company’s investments on the island.

President Anura Kumara Dissanayake, who assumed office in September, along with his National People’s Power (NPP) alliance—which achieved a landmark two-thirds majority in the November 14 general elections—has made anti-corruption a cornerstone of his administration.

Prior to his victory, President Dissanayake promised to cancel the “corrupt Adani deal” if elected. Following his win, the interim administration signaled plans to review the project after parliamentary elections.

The International Monetary Fund (IMF), in its ongoing program with Sri Lanka, has also highlighted the urgency of tackling “corruption vulnerabilities” as part of the country’s recovery efforts.

Controversial Investment in Renewable Energy

The Adani Group’s $442 million investment in a wind power project in Mannar and Pooneryn, northern Sri Lanka, has been contentious since its inception under the Gotabaya Rajapaksa administration in 2022.

Critics, including the main opposition, argued that the contract was awarded without a transparent tender process. Allegations of external influence surfaced when a senior official from the Ceylon Electricity Board (CEB) claimed that Indian Prime Minister Narendra Modi had “pressured” former President Rajapaksa to award the project to Adani—a statement the official later retracted before resigning.

Despite concerns raised by anti-corruption groups, the administration led by Ranil Wickremesinghe proceeded with the project. In early 2023, after the Adani Group’s stocks were hit by a damning report from U.S. short seller Hindenburg, accusing the conglomerate of fraud, then-Foreign Minister Ali Sabry expressed confidence in the project’s future, describing it as a “government-to-government” agreement with India.

Meanwhile, environmentalists and residents from the Mannar region filed a lawsuit in Sri Lanka’s Supreme Court, challenging the project due to environmental concerns and a perceived lack of transparency. A five-member bench is set to hear the case in March 2025.

In addition to the wind power project, Adani is also leading a $700-million container terminal venture in Colombo. This project recently received a $553-million boost from the U.S. International Development Finance Corporation (DFC), marking a significant foreign investment in the sector.