The brothers-co-owners of the Indian Adani Group drove money through offshore companies and brought the younger Gautam to 3rd place in the Forbes global ranking

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According to a report by Hindenburg Research, Vinod “manages a vast maze of offshore shell companies” that “collectively transfer billions of dollars to public and private enterprises. adanand in India, often bypassing mandatory disclosure of the nature of the transaction involving affiliated parties.” This, in turn, helped the Adani Group not comply with Indian legislation requiring third parties to own at least 25% of the authorized capital in stock-listed companies. The Adani Group denies inconvenient ties with the brother of the president of the corporation. “Vinod adanand does not hold any management positions in any of the listed organizations of the Adani Group or in subsidiaries and is not involved in their operations,” the company countered in its 413-page response to representatives of Hindenburg Research, published on January 29, 2023. The conglomerate also added that the Adani Group has “appropriately identified and disclosed” all transactions involving affiliates.

However, Forbes discovered previously unknown transactions that were carried out through offshore funds associated with Vinod. adanand and, apparently, created specifically for the needs of the Adani Group. Operations on these transactions once again confirm Hindenburg Research’s statements about hidden mechanisms and inconsistencies in the conglomerate’s accounting department.

Requested for comment by neither Adani Group nor Vinod adanand did not answer. The latter’s email address, linked to several properties in Dubai, is located in the Adani Global domain zone.

Some of Vinod’s interactions with the Adani Group are in plain sight. Last summer, one of Vinod’s ventures, Endeavor Trade and Investment, brokered Adani Group’s $10.5 billion stake in Indian cement producers Ambuja Cements and ACC Limited from Switzerland’s Holcim, Ambuja Cements disclosed in a public filing. Thanks to the acquired securities, Adani Group has become the second largest cement manufacturer in India.

Other operations are not so obvious. Take, for example, Pinnacle Trade and Investment, a Singaporean company indirectly owned by Vinod. In 2020, the firm entered into a loan agreement with the state-owned Russian bank VTB (it was sanctioned by the US last year). By April 2021, Pinnacle Trade and Investment had taken out a $263 million loan and issued a $258 loan to an unnamed affiliate. A few months later, the firm appointed two investment funds, Afro Asia Trade and Investments and Worldwide Emerging Market Holding Ltd, as guarantors for the loan, according to Singapore documents. Vinod appears to be the owner of the latter: Indian stock filings for June 2020 and August 2022 indicate that he is the ultimate beneficial owner of Acropolis Trade and Investments Ltd in Mauritius, which in turn holds 100% of the capital of Worldwide Emerging Market Holding Ltd.

Both Afro Asia Trade and Investments and Worldwide Emerging Market Holding Ltd. are major shareholders of the Adani Group. As of the close of trading on Feb. 16, these funds held $4 billion worth of shares in Adani Enterprises, Adani Transmission, Adani Ports and Adani Power – all firms recognize the funds as “auxiliary” entities.

According to Internet investment counter Trendlyne, no other securities are held by Afro Asia Trade and Investments and Worldwide Emerging Market Holding Ltd. No. This means that the Pinnacle Trade and Investment loan is essentially collateralized by the value of Adani Group shares. The pledge amount of the shares of four companies adanand in which the funds are invested, none of the funds in the Indian exchange documents does not specify.

By pledging investment funds rather than Adani Group shares as collateral, Pinnacle Trade and Investment may have absolved itself of the obligation to disclose equity capital raised, the Indian stock expert adds. When asked by Forbes to comment on the material, neither Pinnacle Trade and Investment, nor Afro Asia Trade and Investments, nor Worldwide Emerging Market Holding Ltd. didn’t answer.

While the public face of the empire adanand is Gautam, Vinod prefers to keep a low profile. Vinod has a Cypriot passport, resides in Singapore and uses several names, including introducing himself as Vinod Shantilal Shah. The man’s date of birth is unknown.

The only obvious fact of Vinod’s biography is his status as a billionaire. Forbes estimates he is worth at least $1.3 billion, based on his holdings in Worldwide Emerging Market Holding Ltd. and Endeavor Trade and Investment, which owns stakes in family-owned cement companies Ambuja Cements and ACC Limited (excluding equity loans in the latter two). When it turned out that several businesses previously thought to be Gautam’s property were in fact Vinod’s, Forbes reduced Gautam’s estimated net worth. adanand up to $50.7 billion.

However, it is very difficult to clearly separate Vinod’s personal wealth from Gautam’s finances, and the older brother may be much richer. Vinod also owns 10 properties in Dubai, according to real estate data from the Washington DC-based nonprofit Center for Advanced Defense Studies. He also has an apartment in Singapore (registered in his name in the Pinnacle Trade and Investment documents) worth about $4 million. , Virgin Islands, Cayman Islands, Mauritius, Singapore and the United Arab Emirates.

Vinod has lived abroad for at least 30 years. According to a sponsored editorial in the Indian newspaper The Economic Times, he received a master’s degree in engineering from the United States and then opened a textile business in Mumbai in 1976. In the 1980s, Vinod purchased a small plastic packaging factory for $1,000 using his own savings and a bank loan, and brought in his younger brother Gautam to run it. “We started almost from scratch,” Gautam told Forbes in 2009.

By 1989, Vinod had expanded the company’s business into industrial goods trading, set up a new office in Singapore, and subsequently moved there himself. In 1994, the entrepreneur moved to Dubai, where he began trading in sugar, oil and metals – the business already covered Dubai, Singapore and the Indonesian capital Jakarta.

Then the businessman began to build an empire of offshore organizations. According to the Panama Papers leak from the International Consortium of Investigative Journalists (ICIJ), in January 1994, Vinod founded the company in the Bahamas. Two months later, he also asked to change his name on corporate documents from Vinod Shantilal. adanand Vinod Shantilal Shah.

While Vinod was actively developing business in Dubai, Gautam began his own career: in 1988 he established an enterprise, later called the Adani Group, and in 1994 brought it to the stock market. Throughout all these years, Vinod has been closely involved in the affairs of his brother. The Hindenburg Research report notes that he held various positions in Adani Group companies until at least 2011. In addition, Vinod’s 44-year-old son, Pranav, is the managing director at Adani Enterprises to this day.

In 2014, a scandal erupted due to the fact that the Adani Group was allegedly overbilled for equipment for a power plant in the amount of approximately $ 800 million. At that time, the General Revenue Office of India accused Vinod of having, along with employees of the Adani Group, “carried out a planned conspiracy to withdrawal of foreign currency abroad. At first, the case was rejected, but then an appeal was filed on it, and the claim is still pending consideration in the customs authorities of the country. The Adani Group denies any wrongdoing.

Through other transactions since 2012, a Cypriot company owned by Vinod adanand under the name Vakoder Investments received $232 million in loans from a businessman and another offshore firm in Dubai – this follows from corporate documents in Cyprus. Vakoder Investments then spent $220 million buying convertible bonds (credit certificates that pay interest and can be redeemed on a specific date) from Adani Estates and Adani Land Developers, two subsidiaries of Adani Infrastructure and Developers. Later, the term on these bonds was extended until 2024, which means that Vinod most likely holds these securities until now.

Up until 2012, Adani Infrastructure and Developers was a subsidiary of the publicly traded Adani Enterprises. However, according to Adani Enterprises’ 2013 financial report, around the time of those transactions in June 2012, Adani Enterprises apparently sold Adani Infrastructure and Developers for $81.5 million. Four years later, the company reappeared. in the annual reports of Adani Enterprises, this time as an “affiliated enterprise”.

Despite the proposed sale in 2012, Forbes found that by 2017 the family adanand still controlled Adani Infrastructure and Developers through another company called Adani Properties and is owned by three shareholders: a family trust adanand the son of Gautam, Karan adanand, and a subsidiary of Adani Enterprises called Adani Commodities.

The most likely explanation for such operations is family politics. “Sometimes you want to give one family member the management of a certain division of the company,” Hanna explains, and clarifies that in a family business in India, such complex arrangements are common.

Even though Hindenburg Research names Vinod as the central figure in the billion-dollar scam, Vinod himself would certainly take offense at such a title. In 2016, along with one of his consultants, he wrote in a sponsored editorial: “In an age of lies and corruption, it is rare to find a person who sticks to his word and values ​​loyalty and loyalty to his principles over greed and his own whims. Vinod Shantilal adanand – precisely from those people who honor the heritage of the family and promote these values ​​themselves.

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