New Delhi: A new report by Forbes has shed more light on Gautam Adani’s brother Vinod’s role in conducting massive deals for the Adani Group.
Forbes’s report says it also found that Vinod Adani is “nearly five times richer than previously known.”
Two earlier reports, by Bloomberg and Forbes have alleged that Vinod Adani has a powerful position in the Group despite no formal managerial positions and that he manages a vast labyrinth of offshore shell entities.
The latest report, published on February 28, notes that French oil giant TotalEnergies purchased for $2 billion a 20% stake in Adani Green Energy in 2021, offering Adani significant credibility.
These shares that TotalEnergies bought were priced $4.1 billion on the Indian stock exchange. Thus the purchase was a bargain for TotalEnergies too.
The price they paid for the shares on January 21, 2021 was 8% lower than the average price of the shares over the previous year and 62% lower than the average over the previous six months, Forbes reported.
And in what Forbes calls “unconventional structuring,” TotalEnergies did not directly buy the shares but instead acquired two Mauritius-incorporated funds which held the stock from a third Mauritius entity, Dome Trade and Investment Limited. Dome Trade is owned by Vinod Adani, however, this ownership is not direct but comes “through a web of entities in Mauritius, the UAE and the British Virgin Islands.”
The report says that Vinod Adani has been instrumental in facilitating these deals.
The report comes as ripples are still being felt of a report released by US short-seller Hindenburg Research, which accused Adani Group of stock manipulation and fraud. This report also put Vinod Adani, who has no formal position in the company, under the spotlight. Adani Group, which has lost billions in the aftermath of the report, has claimed that Vinod does not have a role in the daily affairs of the Group’s businesses.
Forbes notes that TotalEnergies’ stocks have also been affected by the shares rout.
Aswath Damodaran, a professor of finance at New York University’s Stern School of Business, tells Forbes that a reason behind selling Mauritius funds instead of direct Adani Green Energy shares could be to avoid taxes.
Mark Humphery-Jenner, an associate professor of finance at University of New South Wales Business School, say that both parties could have been wary of crashing Adani Green’s share price, given its low float.
Vinod was also crucial to another deal made between Adani Group and TotalEnergies, in 2019, when the latter bought a 37.4% state in Adani Gas. “The deal closed in February 2020, with TotalEnergies paying $714 million, or $50 million less than the open market valued them at the time,” the report said. Four of the six Adani-controlled entities that TotalEnergies bought the shares from were Mauritius-based funds owned by Vinod.
The report also lists other deals that Vinod Adani reportedly participated in, to conclude that he is “much wealthier” than previously thought. In addition to funds, Vinod is also the owner of 37 residential and commercial properties in Dubai alone.
It notes:
“Forbes estimates that Vinod is worth at least $6 billion, up from our previous estimate of $1.3 billion published less than two weeks ago.”
While Adani’s public filings note he is a Cyprus citizen, he has an Indian passport, finds Forbes.