Disqualified Wayanad MP and senior Congress leader on Thursday launched a fresh attack on PM Modi and Gautam Adani in a bid to cast aspersions that the industrialist has gotten a Chinese national involved in infrastructure projects in India. Rahul Gandhi posed a question and asked why are India’s critical ports, airstrips being built and controlled by a ‘Chinese company’.
Of course, Chinese investment in India’s infrastructure would be a significant security concern and as responsible citizen of India it should bother us. But how much truth is in the claims made by Rahul Gandhi. And who is this mysterious ‘Chinese citizen’ Rahul Gandhi talking about.
‘Adani Watch’ website and dubious claims
Rahul Gandhi had shared a screenshot of one ‘Adani Watch’ website with his own social media logo. The headline read “EXCLUSIVE: Firm linked to Adani’s infrastructure projects owned by Chinese national”. Hmm. Okay. Let’s see what rest of the article says. The article is written by one Ravi Nair and edited by one Paranjoy Guha Thakurta, both very vocal Modi haters. Which is fine, if they would have had their facts in order.
The first line of the article claims that a Chinese company connected with Adani Group is involved in building critical infrastructure in India. “The firm, PMC Projects (India) Private Limited, has been developing seaports, container terminals, airstrips, electricity transmission lines and railway tracks, among other public utilities,” the report claimed.
Curious, we got looking for the investment details of PCM Projects (India) Pvt Ltd details.
So, for a company which is constructing such high stake critical infrastructure in India only has investments in mutual funds and that too at an approximate value of Rs 6 crore in 2021. What are they constructing?
Further, the companies related to Adani Group which are actually carrying out infrastructure activities are all wholly owned subsidiaries of Adani Enterprises Limited.
Adani Metro Transport Ltd was formed to focus on metro rail infrastructure and as seen above it is a 100% owned subsidiary of Adani Enterprise Limited (AEL), the flagship of Adani Group.
Adani Airports Holdings Ltd is an airport operating company which currently operates Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram airports. This, too, is a 100% owned subsidiary of AEL.
Adani Infrastructure Pvt Ltd which is involved in power transmission, thermal power and solar power is also a 100% owned subsidiary of AEL.
Again, another critical infra company, Adani Railways Transport Ltd – that is also a 100% subsidiary of AEL, the publicly listed company. The above information is derived from the annual financial accounts for the year ended 31 March 2022 for Adani Enterprises Limited. You could read the 508 page document here [pdf].
It is also notable that while Rahul Gandhi claims PMC is building critical infrastructure, the Hindenburg report claims otherwise. The report basically claims that PMC Project is an entity of the Adani group. It claims that it was used to route money out of Adani’s listed companies. While Rahul Gandhi claims PMC Project has built India’s critical infrastructure like ports, airstrips, railway tracks and electricity lines, Hindenburg Research says the company does nothing, and it is just a dummy company of Adani, and most of its revenue comes from other Adani Group companies.
The Hindenburg report says that there are no signs that “PMC Projects does anything separate and apart from functioning as an arm of the Adani Group”. It further mentions that according to a 2014 DRI investigation, PMC Projects was a “dummy firm” used by the Adani Group in a coal/power equipment over-invoicing scandal.
Therefore, Adani has been accused of using PMC Projects as a dummy firm to route money. Nowhere in the report, Hindenburg claimed that PMC was working on critical infrastructure projects as Rahul Gandhi is claiming.
It is also notable that while DRI had alleged that PMC was a dummy company used in an over-invoicing scam, the Customs, Excise & Service Tax Appellate Tribunal (CESAT) had quashed the charges. After DRI had moved Supreme Court against this order, the Supreme Court had also ruled in favour of the company, ruling out any irregularities. The rulings had said that no link was found between PMC and Adani.
What is a 100% owned subsidiary company?
A wholly owned subsidiary is a company where 100% of its shares are held by another corporation, which is called a parent company. In above cases, the companies which are invested in the critical infrastructure development are – as seen – are 100% subsidiaries of Adani Enterprises Limited, an Indian company – which is publicly listed.
Nowhere can one see PCM Projects India Pvt Ltd being part of the annual accounts or being associated with Adani Enterprises Limited. To prove that PCM Projects carrying out operations on behalf of Adani Enterprises, ‘Adani Watch’ provides its registered office as prove of it being related to Adani Group. According to the Companies Act, 1956 (as amended time to time), more than one company can have same registered office address and they could be not related too. Just because Nair and Thakurta are unaware of the law, does not make something illegal.
The ‘China’ connection
Now, we’ve made one point clear that the claims on PCM Projects has absolute no basis as ‘Adani Watch’ never provided any evidence to back their claims.
Moving on, let us go to the ‘Chinese company’ theory Rahul Gandhi has peddled shooting off ‘Adani Watch’ fable. ‘Adani Watch’ cites Hindenburg report and claims that it made “explosive allegations about the group’s practices, discussed PMC’s activities in some detail.” Let us go back to the allegations made by Hindenburg report, which Adani Group has categorically denied. But for arguments’ sake, let us revisit them.
Hindenburg report only talks about the ‘owner’ of PMC projects. Hindenburg report also makes it clear that Adani Group has not mentioned PCM as its ‘related party’. But let us talk about the ‘owner’ here.
As per Hindenburg report, Chang Chien-Ting, son of Chang Chung-Ling, an old associate of Gautam Adani’s elder brother Vinod Adani, was the ‘sole beneficial owner’ of PCM Projects. “Taiwanese media covered an official government event attended by PMC Projects’ owner Chang Chien-Ting and described him as “Adani Group’s Taiwan Representative.” The article included a picture of Chien-Ting holding an Adani sign and speaking on behalf of the Adani Group at the event.” Hindenburg report mentions.
So going by Hindenburg report itself, is now clear that PMC Projects is a separate entity as its sole beneficial owner is Chang Chien-Ting. And he also acts as Adani Group’s Taiwanese representative. If we were to believe this is correct, two corporates CAN get into agreement where they represent each other in their respective countries – that is how global businesses work. Taiwan is a friendly country and India has good relations with Taiwan. So if an Indian company gets into a commercial transaction with a Taiwanese national, it should be treated as business as usual, right?
But wait. Did we say Taiwanese national? Yes. Because that is what Chang Chien-Ting is.
Here is what Adani Watch report says:
Adani Watch report mentions that Chang Chien-Ting is a citizen of ‘Republic of China’. Which is correct. But in very next line questions ‘Chinese ownership of an Indian company’. But Chang Chien-Ting is not a citizen of ‘People’s Republic of China’ but of ‘Republic of China’. The former is umm, China as we all know and latter is Taiwan. Chang Chien-Ting is NOT a Chinese citizen but a Taiwanese.
So even if for all arguments’ sake if we are to believe that Adani group is undertaking business with Chang Chien-Ting, he would be a Taiwanese national, not a Chinese and company owned by him would be Taiwanese, not Chinese. Without getting into the dispute between China and Taiwan, it would be safe to say that Chang Chien-Ting is NOT the Chinese national Rahul Gandhi seems worried about.
Right above his nationality, in the same screenshot, they have mentioned his address which is in Taiwan. If they would have read it, they would know it is Taiwan and not China. But in their blind hate for Modi, they chose to ignore facts – whether wilfully or maliciously, we leave it up to readers.
So which Chinese national is he talking about? Or did he again mix up separate reports and come up with a conspiracy theory of his own? Or does Rahul Gandhi endorse China’s ‘One China’ policy of the ruling Chinese Communist Party (CCP) that China and Taiwan are part of China?
Rahul Gandhi, China, Congress and CCP – The secret affair
On August 7, 2008, when Congress-led UPA was in the power, the party had signed an agreement with the CCP. Rahul Gandhi’s mother, Sonia Gandhi was the party president at that time. India’s ruling party had signed an MOU with the ruling party of China.
During UPA1 in 2008, the Congress party and the Communist Party of China (CPC) had signed a deal in Beijing for exchanging high-level information and co-operation between them. The memorandum of understanding (MoU) also provided the two parties with the “opportunity to consult each other on important bilateral, regional and international developments”.
Interestingly, the MoU was signed by the then Congress general secretary Rahul Gandhi and on the Chinese side, it was signed by none other than Xi Jinping himself, who was then the Chinese vice-president and standing committee member of the CPC’s politburo. The MoU was signed in the presence of his mother and party president Sonia Gandhi.
Before the signing of the MoU, the then Congress president Sonia Gandhi and her son Rahul Gandhi had held a long meeting with Xi and other senior leaders of the Communist Party of China to discuss issues of mutual interest.
In 2008, Sonia Gandhi had visited Beijing along with Rahul, daughter Priyanka, son-in-law Robert Vadra and their two children to attend the opening of the Olympic Games. A year before, Sonia Gandhi and Rahul Gandhi had also led a delegation of the Congress party to China.
The 2008 MoU between CCP and Congress came at a time when the Left parties in India had expressed lack of trust in UPA-1 government led by Congress. The India Today report suggests that even as China was aware of the political landscape in India, Xi Jinping went ahead and signed the pact with Congress as CCP wanted deeper ties with Congress, especially the Gandhi family.
Not just the MoUs, but the close relationship between the Chinese leadership and the Congress party, especially Rahul Gandhi had also got highlighted just few years ago during the Doklam stand-off when Rahul Gandhi was caught secretly meeting Chinese officials.
The Gandhi-scion, not once but twice, was caught meeting Chinese officials, raising suspicion among the policymakers regarding the intent of his secretive meeting with the Chinese.
The first meeting had taken place in 2017, when Rahul Gandhi had a meeting with Chinese Ambassador to India Luo Zhaohui, especially at a time when India and China were in the middle of a stand-off at Doklam. At first, the Congress party had denied such meetings and had termed news reports suggesting that the Gandhi-scion had indeed met Chinese officials as ‘fake news’.
However, Congress party had to face massive embarrassment after the Chinese embassy had themselves confirmed about the meeting between the then Congress vice president and the Chinese envoy.
This meeting was especially suspicious, because the Congress party and Rahul Gandhi, at that time were vehemently attacking the Indian government over their stand in the ongoing military standoff with China.
TaiIn 2018, Rahul Gandhi had himself revealed regarding the secret meeting with a couple of Chinese ministers during his trip to Kailash Mansarovar in September 2018. The meeting was kept secret initially but later Rahul Gandhi had revealed the details of the meeting accidentally leading to people to speculate even more as to why both the Congress party and China were trying to hide the meeting.
To summarise:
- ‘Adani Watch’ report makes absolutely baseless claims about an obscure company being a close associate of Adani Group being involved in creating critical infrastructure projects.
- As per Adani Enterprises Limited, the flagship company of Adani Group, the companies which are actually involved in making critical infrastructures are 100% wholly owned subsidiaries of AEL (no Chinese involved here).
- The person ‘Adani Watch’ and Rahul Gandhi are referring to as ‘Chinese national’ is not a Chinese national but a Taiwanese one. India has friendly bilateral relations with Taiwan.
- Rahul Gandhi has yet again floated conspiracy theories based on his very limited understanding of how businesses work. He should read up more if he does not want to end with an egg on his face. You can read about his other wild theory here.
- And while Rahul Gandhi is trying to portray that Adani, with backing of PM Modi, is getting Chinese individuals involved in critical infrastructure projects, one expects that at least the person they accuse of being Chinese is Chinese to begin with.