India’s billionaire Gautam Adani has settled its case with the US Securities and Exchange Commission (SEC) as he continues to snub Kenya talks, over compensation after the verbal cancellation of a multi-billion shilling deal to build electricity transmission lines and substations.
US enforcement agencies plan to end actions against Mr Adani and his business conglomerate, following accusation of the tycoon’s involvement in a $265 million bribery scheme.
President William Ruto, in November 2024, ordered the cancellation of a 30-year, Sh96 billion public-private partnership deal that an Adani Group firm signed with the energy ministry to construct power transmission lines citing the US indictment.
Adani and his nephew Sagar Adani paid $18 million in a settlement with the SEC without admitting or denying the allegations-which formed the basis of Kenya’s termination.
But as the billionaire battled to clear his longstanding US legal problems on back of his close relationship with President Donald Trump’s, he remained muted and detached in Kenya’s push to settle the termination of the Sh96 billion deal.
Multiple lawyers familiar with the Adani deals in Kenya reckon that the Indian conglomerate was little engaged for an amicable resolution to the Adani contract and the establishment of compensation for one of the world’s richest individuals.
‘They have never accepted or rejected the cancellation made during the presidential state of the nation address,’ said a top lawyer who advised on the Adani deals and sought anonymity.
‘They have remained reticence on the Kenyan matter. They believe there was no legal basis for cancellation.’
The Public-Private Partnership (PPP) unit at Treasury last year indicated that talks were underway for amicable resolution to the Adani contract. This came as it emerged that Kenya had not issued a formal termination notice to the Adani Group.
The termination was hinged on Section 62 of the PPA Act, with Kenya citing material governance issues and offenses under the Anti-Corruption and Economic Crimes Act.
Adani had been charged by US prosecutors on November 20, 2024 over an alleged years-long scheme to bribe Indian officials in exchange for favourable terms on solar power contracts that were projected to bring in more than $2bn in profit.
US federal prosecutors said more than $250mn in bribes were ‘offered and promised’ between 2020 and 2024 to people in the Indian government as part of the scheme, which was allegedly concealed from the US banks and investors from which they raised billions of dollars.
The day after the US indictment, President Ruto on November 21, cancelled the 30-year public-private partnership deal that an Adani Group firm signed with the energy ministry in October, 2024 to construct power transmission lines.
President Ruto attributing the cancellation to “new information provided by investigative agencies and partner nations”.
At the time of cancellation, the Adani deals in Kenya had drawn sharp criticism from many politicians and members of the public over concerns about a lack of transparency and value for money.
‘In November 2024, the indictment of the Adani principles was live and conviction was a real prospect,’ said another who requested not to be named. ‘With the charges, now reportedly being dropped, that foundation has softened.’
The US Justice Department is close to dropping criminal fraud charges against Mr Adani.
Adani on Thursday resolved a related civil fraud lawsuit brought by the Securities and Exchange Commission (SEC) over an alleged scheme to bribe Indian government officials, subject to court approval.
Kenya favoured the less costly route of mutual separation over termination.
Termination is an action initiated by a single party, and in this case, will see Kenya pay Adani Group at least Sh5 billion based on lawyers’ estimates and the size of the deal.
Mutual separation is a negotiated agreement ending the agreement on the power deals inked in October, 2024, which will see Kenya offer a small payout to cover costs that Adani used in securing the contract.
Some lawyers argued that termination under Section 62 of the PPP Act does not provide for compensation.
The PPP directorate reckoned last year that it was not possible to talk about termination costs.
‘Termination process is underway, thus the termination costs are yet to be determined,’ the PPP unit said in a review of the public-private partnership deals as at June.
Under the PPP deal, Adani inked a deal to construct two power transmission lines and two substations.
This included a 206km 400kV Gilgil-Thika-Malaa-Konza power transmission line that will boost power supply around Nairobi. The line was expected to be completed in 2027.
It was also set to build the 70km 132kV Menengai-Olkalou-Rumuruti transmission line that will extend high voltage to Olkalou, providing an alternative evacuation path for the Menengai geothermal complex. The line was slated for completion in 2028.
Adani was also building two substations– the 132kV Thurdiburo substation and the 400/220/132kV substation at Rongai-both set to be built by 2028.
But the election of President Trump saw the US soften its stance in pursuit of Mr Adani.
Representatives for Adani have since met officials from Trump’s administration to seek dismissal of criminal charges in an overseas bribery probe, with a resolution possible.
President Trump also paused prosecutions under the Foreign Corrupt Practices Act (FCPA), further weakening Adani’s indictment.
The FCPA was central in the pursuit of the Adani’s and President Trump reckons the law is a disadvantage to American businesses competing globally.
India’s conglomerate was expected to generate outsized profits for 30 years before handing over the lines to the Kenyan government.
It was to spend Sh96 billion on capital expenditure, and expected to generate revenues of Sh634 billion in the 30 years or Sh21.2 billion annually.
The conglomerate was going to recoup its investments through a new charge in households’ monthly electricity bills technically called a wheeling charge.
The revenues excluded other expenses like debt, salaries and maintenance costs.