By: Isuru Parakrama

November 24, Colombo (LNW): Sri Lanka must exercise heightened caution regarding the Adani Group’s power project on the island following the recent indictment of the company’s chairman, Gautam Adani, and several others on multiple fraud charges in the United States, experts emphasised in a report by The Hindu.

The charges, brought by federal prosecutors in New York, have raised concerns among experts who urge the Sri Lankan government to closely scrutinise the project’s legitimacy.

Nishan De Mel, the Executive Director of Verité Research, a Colombo-based think tank, highlighted that Sri Lanka has a history of significant corruption cases being exposed in international jurisdictions.

He pointed to the bribery allegations involving SriLankan Airlines’ aircraft procurement from Airbus, which were uncovered through a UK-based investigation, and the revelations in the Pandora Papers, which implicated local politicians and businessmen.

De Mel emphasised the importance of reinforcing anti-corruption measures within Sri Lanka to shield the country from potentially corrupt dealings, stating, “It is critical for Sri Lanka to redouble its efforts to combat corruption and ensure that we are not exposed to fraudulent or unethical deals.”

The indictment of Adani and the fraud allegations against his company have sparked a public outcry in Sri Lanka. Activists and concerned citizens have taken to social media, demanding more transparency and accountability regarding the Adani Group’s $442 million wind power project in Mannar and Pooneryn, located in the northern part of the island.

The project, initiated under the former Gotabaya Rajapaksa administration, has been embroiled in controversy since its inception in 2022.

The main opposition parties have accused the Adani Group of securing the project through “backdoor deals,” without a competitive tender process. A former senior official at the Ceylon Electricity Board (CEB) publicly claimed that the project was awarded to Adani following pressure from Indian Prime Minister Narendra Modi.

Although the official later retracted his statement and resigned, the allegations sparked significant debate about the transparency and fairness of the deal.

Despite these concerns, the administration under President Ranil Wickremesinghe has proceeded with the project, even as global scrutiny of the Adani Group intensified in early 2023.

The Adani Group’s financial troubles became widely known when US short-seller Hindenburg Research accused the company of engaging in fraudulent practices, claiming it was involved in the “largest con in corporate history.”

Despite this, Sri Lanka’s Foreign Minister at the time, Ali Sabry, expressed unwavering confidence in the project’s future, asserting that it was a “government-to-government” agreement with India.

Environmentalists and local residents in Mannar have raised additional concerns over the project, arguing that it could have adverse environmental impacts. In early 2023, a legal challenge was filed in Sri Lanka’s Supreme Court, seeking to halt the project on the grounds of insufficient transparency and environmental risks.

The case is set to be heard by a five-judge bench, with the next hearing scheduled for March 2025.

In addition to the wind power project, the Adani Group is also involved in a significant infrastructure project in Sri Lanka. It is leading the development of a container terminal at the Port of Colombo through a joint venture with the Sri Lanka Ports Authority (SLPA) and local conglomerate John Keells Holdings.

In November 2023, the US International Development Finance Corporation (DFC) announced a $553 million investment in the terminal project, which is valued at $700 million.

As the Adani Group continues to expand its footprint in Sri Lanka, concerns over corruption, transparency, and environmental impact remain at the forefront of public discourse.

The Sri Lankan government, therefore, facing increasing pressure to ensure that these projects proceed with full accountability.