Forbes identifies Vinod Adani’s unreported transactions involving offshore funds
The deals lend credence to Hindenburg’s report on hidden leverage and accounting irregularities within the Adani Group
Hyderabad: There are more concerns for the Adani Group. First, it was Hindenburg Research that came out with a report against Gautam Adani with allegations of stock manipulation and accounting fraud. It also mentioned Vinod Adani, the elder brother of Gautam Adani, several times in the report. Adani Group had termed these accusations unsubstantiated.
Now, business magazine Forbes, in a stinging piece focusing on Vinod Adani, has identified previously unreported transactions involving offshore funds that appear to have been designed to benefit the Adani Group. The deals lend credence to Hindenburg’s report on hidden leverage and accounting irregularities within the Adani Group, the report said.
Earlier, the Hindenburg report alleged that Vinod managed offshore shell entities that have collectively moved billions of dollars into Adani’s publicly listed and private entities without the required disclosures.
The Adani Group, in a reply to Hindenburg in January, said Vinod Adani did not hold any managerial position in any Adani listed entity or their subsidiary and that he had no role in their day to day affairs.
According to Forbes, Endeavour Trade and Investment Limited, one of Vinod’s companies, served as the Adani Group’s acquisition vehicle for its $10.5 billion takeover of Swiss firm Holcim’s stakes in Indian cement companies Ambuja Cements Limited and ACC Limited, according to Ambuja’s public filing. The deal made the Adani Group India’s second largest cement company.
Frobes said Pinnacle Trade and Investment Pte. Lte., a Singapore company indirectly controlled by Vinod, in 2020 entered into a loan agreement with Russia’s state-owned VTB Bank.
By April 2021, Pinnacle had borrowed $263 million and lent out $258 million to an unnamed related party. Later that year, Pinnacle offered two investment funds—Afro Asia Trade and Investments Limited and Worldwide Emerging Market Holding Limited—as guarantors for the loan, according to Singapore filings.
Vinod is the ultimate beneficial owner of Mauritius-based Acropolis Trade and Investments Limited, which in turn owns 100 percent of Worldwide Emerging Market Holding Limited, according to Indian stock exchange filings in June 2020 and August 2022, Forbes said.
Both Afro Asia Trade and Worldwide are large Adani Group shareholders.Together, the two funds hold $4 billion (as of Feb 16 close-of-market prices) of stock in Adani Enterprises, Adani Transmission, Adani Ports, and Adani Power.
All of these acknowledge the funds as ‘promoter’ entities. Afro Asia Trade and Worldwide do not hold any other securities. That means Pinnacle’s loan is secured, effectively, by the value of the funds’ Adani company shares, Forbes said.
Neither fund has disclosed share pledges in Indian financial filings for the four Adani companies they are invested in.
“You’re essentially borrowing money on the back of funds that are invested in Adani to lend to maybe another Adani entity,” Forbes quoted a securities expert with whom it shared its findings for a review as saying in the report. It added that Pinnacle, Afro Asia and Worldwide Emerging Market, Adani Group and Vinod Adani did not respond to its requests for comment.
The worth of Vinod, a Cypriot passport holder and permanent resident of Singapore, is pegged at $1.3 billion based on his ownership of Worldwide Emerging Market Holding Limited and Endeavour Trade and Investment Limited, which owns shares of Adani companies and cement producers Ambuja and ACC.
He owns 10 properties in Dubai and an apartment in Singapore (registered to his name in Pinnacle’s filings), worth an estimated $4 million. Vinod owns or has been associated with at least 60 entities in offshore tax havens including the Bahamas, the British Virgin Islands, the Cayman Islands, Cyprus, Mauritius, Singapore and the United Arab Emirates, the Forbes report said.
According to the International Consortium of Investigative Journalists’ Panama Papers leak, Vinod established a company in the Bahamas in January 1994. Two months later, he requested to change his name on the company’s documents from Vinod Shantilal Adani to Vinod Shantilal Shah.
He held various executive positions in Adani Group companies until at least 2011, as per the Hindenburg report. Vinod’s 44-year-old son, Pranav, is still a managing director at Adani Enterprises, the Forbes report said.
Vinod was accused by India’s Directorate of Revenue Intelligence of having worked with Adani Group employees to “execute the planned conspiracy of siphoning foreign exchange abroad. That case is still pending before India’s customs authorities. The Adani Group denied wrongdoing in this.
In 2012, a Cyprus company owned by Vinod Adani named Vakoder Investments received $232 million in loans from Vinod and an offshore firm in Dubai. Vakoder then spent $220 million to purchase compulsorily convertible debentures—loan certificates that pay interest and convert to equity at a specific date—in Adani Estates and Adani Land Developers.
Those debentures were later extended to 2024, meaning that Vinod likely still holds them.These two companies are subsidiaries of another firm Adani Infrastructure and Developers. Until 2012, Adani Infrastructure and Developers was a subsidiary of publicly traded Adani Enterprises.
In June 2012, Adani Enterprises apparently sold Adani Infrastructure and Developers, recording a gain of $81.5 million. This was as per Adani Enterprises’ 2013 annual report. Four years later, Adani Infrastructure and Developers reappeared in Adani Enterprises’ annual reports as a ‘related enterprise’, Forbes report said.
Despite the reported 2012 sale, Forbes found out that by 2017, the Adani family still controlled Adani Infrastructure and Developers through another company named Adani Properties.
Adani Properties is owned by three shareholders-the SB Adani Family Trust, Gautam’s son Karan Adani and Adani Commodities LLP, a subsidiary of Adani Enterprises, it added.
