New Delhi: Though Gautam Adani’s older brother Vinod does not hold any managerial positions in any listed companies of the Adani Group, he plays an “opaque and powerful” role in the “embattled dynasty”, says a new report by Bloomberg.
The Bloomberg report is the latest to reveal the powerful role that the 74-year-old Vinod – who maintains a low profile – plays in the family-run business, despite not holding any positions in listed companies. The report by Hindenburg Research, which sent the Adani Group spiralling into a crisis, had alleged that Vinod “manages a vast labyrinth of offshore shell entities” which “regularly and surreptitiously transact with Adani”.
In a subsequent report, Forbes peeled another layer, saying Vinod pledged Adani Group promoter stocks for loan from Russia’s VTB bank through a Singapore-based company which he “indirectly controlled”. The report said alleged that through a web of companies in various offshore territories that have apparently not been disclosed to regulatory authorities, Vinod played a key role in the Adani Group’s expansion.
Now, Bloomberg reports that when the Adani Group neared the completion of its $10.5 billion purchase of two cement businesses in August 2022, the “conglomerate and its banks put out some particularly complicated filings”. In the filings was a “diagram of seven unlisted firms registered in the British Virgin Islands, Mauritius and Dubai”, which were interlinked. One of them would be buying the cement company’s shares in the open market.
“But the ultimate beneficiary of the seven entities wasn’t listed as the group’s public face and chairman, billionaire Gautam Adani. Instead, the filings said their beneficial owners were his older brother, Vinod, and Vinod’s wife Ranjanben,” the report says.
It says that the “appearance of their names in connection with the group’s largest ever acquisition suggests the influence that Adani’s little-known brother wields in the sprawling empire — as well as the family’s style of using a maze of small companies when doing big business”.
Vinod works out of Dubai for years and is a Cypriot national according to filings accessed by Bloomberg. Since the Hindenburg report was published on January 24, Adani Group has lost $140 billion in its shares. Gautam Adani’s wealth has been shorn of $72.9 billion, while Vinod’s wealth has dropped from $1.4 billion before the report to about $1 billion, according to the Bloomberg Billionaires Index.
In the Adani Group’s reply to Hindenburg’s allegations, it said Vinod Adani does “not hold any managerial position in any Adani listed entities or their subsidiaries and has no role in their day to day affairs”. It issued an identical response to Bloomberg‘s “detailed set of questions”, adding that the questions “are of no relevance, and we cannot comment on the business dealings and transactions of Mr. Vinod Adani”.
Bloomberg said that Vinod is a “key negotiator” for the Adani Group when it is raising funds from international markets. He is involved in “planning the group’s strategic direction”, a person familiar with the matter told the website.
The report says that several debt filings put Vinod as a “key figure within the conglomerate” and say the Adani Group should be understood to mean “Vinod, Gautam and another brother Rajesh, who is managing director, as well as other entities such as a family trust”.
Delving into other cement acquisitions by the Adani Group, Bloomberg said that the purchases of Swiss giant Holcim AG’s cement assets in India, along with the deal for Ambuja Cements Ltd. and ACC Ltd. were completed via the Mauritius-based entity Endeavour Trade and Investment”.
At the Endeavour’s address listed in Mauritius, Bloomberg found the offices of Amicorp, “an outside company that provides legal and administrative services to corporations”. Hindenburg claimed that Amicorp “has worked widely to help the Adani Group to build a network of offshore entities”.
The head of a major family-controlled Indian firm told Bloomberg that the allegations against the Adani family “have shone a bad light on the country and in particular companies run by a network of relatives”. The person asked “not to be identified to talk freely about one of the country’s most powerful tycoons”, the report says.
The allegations “risk tarring large swathes of Indian industry”, even though many family-run businesses have largely professionalised their management over recent years, the person added.
Hindenburg founder Nate Anderson tweeted the Bloomberg article, saying the piece confirms that Vinod Adani negotiates financing for the Adani Group. “Meanwhile Adani is still claiming he has no official role & is not a related party,” he said.
Bloomberg out with a piece on Vinod Adani, confirming he negotiates financing for Adani, was key to its largest acquisition & works 2-3 hours a day in an Adani office.
Meanwhile, Adani is still claiming he has no official role & is not a related party.https://t.co/S7mBeHRtL9
— Nate Anderson (@ClarityToast) February 23, 2023