Billionaire investor George Soros says turmoil at Adani will cost Modi govt

Billionaire philanthropist George Soros believes the turmoil at Gautam Adani's business empire may weaken Prime Minister Narendra Modi's hold on the government.

Adani group has been under severe pressure since the US short-seller Hindenburg Research on January 24, accused it of accounting fraud and stock manipulation, allegations that the conglomerate has denied as "malicious", "baseless" and a "calculated attack on India".

While listed companies of the group lost over USD 125 billion in market value in three weeks, opposition parties inside and outside Parliament attacked the BJP government for the meteoric rise of the ports-to-energy conglomerate. Stocks of most group firms have risen in the last couple of days.

Soros, in a speech at the Munich Security Conference on Thursday, said Modi would "have to answer questions" from foreign investors and Parliament on allegations the Adani group is facing.

Soros in his speech said the turmoil at Adani may open the door to a democratic revival in the country.

His near 42-minute speech oscillated between climate change, Russia-Ukraine war, rumbling in the US, Turkey disaster and failures in China.

"Modi and business tycoon Adani are close allies; their fate is intertwined," he claimed. "Adani is accused of stock manipulation and his stock collapsed like a house of cards. Modi is silent on the subject, but he will have to answer questions from foreign investors and in Parliament."

"This will significantly weaken Modi's stranglehold on India's federal government and open the door to push for much needed institutional reforms," he said. "I may be naïve, but I expect a democratic revival in India," he added.

The 92-year-old investor started his speech at the conference talking of understanding the current state of affairs and finding a way to distinguish what is important from what is less so.

"Let me start with a bold assertion. While two systems of governance are engaged in a fight for global domination, our civilization is in danger of collapsing because of the inexorable advance of climate change.

"This is a very succinct statement, but I believe it provides an accurate summary of the current state of affairs," he said, devoting a good deal of his speech on climate change.

He then stated that as the founder of Open Society Foundation, he considers open societies "morally superior" to closed ones.

At this point, he talks of repressive states and distinguishes between open and closed societies.

"India is an interesting case. It's a democracy, but its leader Narendra Modi is no democrat," he claimed.

Modi, he said, maintains close relations with both open and closed societies.

"India is a member of the Quad (which also includes Australia, the US, and Japan), but it buys a lot of Russian oil at a steep discount and makes a lot of money on it," he said before turning to Recep Tayyip Erdogan of Turkey.

"Erdogan has much in common with Modi," he said. "But, while Modi seemed to be firmly in the saddle until recently, Erdogan has mismanaged the Turkish economy and will face elections in May. All his efforts are focused on winning the elections." Soros thereafter moved on to critique Erdogan's lack of effort during the earthquake, and continued to talk about the failing state of democracy in other nations.

The ruling BJP has reacted sharply to Soros' statements by saying that he "was not only targeting the Prime Minister but also the Indian democratic system".

BJP leader and Union minister Smriti Irani told reporters. "Everyone should condemn his remarks in one voice".

"This war is being mounted against India and what stands between the war and India's interests is Modi," she said. She alleged that Soros wanted to destroy Indian democracy and wanted some "hand-picked" people to run the government here. He has created a fund of over USD one billion to intervene in democratic systems, including in India, she claimed.

The opposition in India was also quick to react to Soros' speech. The Congress said whether the Adani issue sparks a democratic revival in the country depends entirely on the grand old party and other opposition parties, and it has nothing to do with billionaire investor George Soros.

"Whether the 'PM-linked Adani scam' sparks a democratic revival in India depends entirely on the Congress, Opposition parties and our electoral process. It has nothing to do with George Soros," tweeted Congress general secretary Jairam Ramesh.  

Meanwhile, Trinamool Congress MP Mahua Moitra mocked Irani's response by tweeting: "Every Indian urged by Hon’ble Cabinet Minister to give fitting reply to George Soros. Please bang your thalis at 6 pm sharp today."

The opposition has been demanding a JPC probe into the allegations against the Adani Group by US-based short-seller Hindenburg Research.

With inputs from PTI