New Delhi: Vinod Adani, the controversial brother of billionaire Gautam Adani, has stepped down as director of three companies connected to Adani’s coal mine in Australia, which involves billions of dollars of Adani money, reports Bloomberg.
These resignations “happened just days before India’s Supreme Court ordered a committee to probe if regulators had failed to oversee Adani Group”. It has been reported earlier that The Securities and Exchange Board of India is examining whether some transactions between the group and Vinod were properly disclosed.
Vinod stepped down as director of Carmichael Rail and Port Singapore, the company that acquired assets from the Adani Enterprises unit, on February 27. He also resigned as director of two subsidiaries, Carmichael Rail Singapore Pte. and Abbot Point Terminal Expansion Pte., filings show.
Also read: Questions SEBI Needs to Ask Adani Group, Now That It Is Owning Up to Brother Vinod
These companies that Vinod resigned from were responsible for bailing out the Adani Carmichael mining project in Australia through a complex set of financial flows, around 2013 and then after 2018, through jurisdictions where public disclosure is hard to come by, Mauritius, Cayman Islands and UAE, reports Bloomberg News. It says it has found that the money from Vinod’s companies has likely covered a significant share of Gautam’s mining project in Australia.
As Adani’s dealings come under renewed scrutiny, more so after the Hindenburg Report by a short-seller in January led to a situation where almost $120 billion in market value was wiped out, there have also been questions raised about the extent of Gautam’s elder brother Vinod’s involvement in the group. There are “questions over governance, disclosures and whether the conglomerate has been benefitting from its closeness to Prime Minister Narendra Modi’s government and importance in carrying out its agenda”, writes the news agency.
The Hindenburg report says that Vinod has played a crucial role in executing what it alleged is “the largest con in corporate history”. Adani Group, which hasn’t been charged with any crimes, has denied the accusations.
Adani & Adani in Australia: troubling questions
Documents related to the Carmichael mining project in Australia are cited by Bloomberg to “illustrate why some call Vinod the quiet power behind his brother’s ascent”. But an Adani Group representative said Vinod was a shareholder but with “no management role in the development of the Carmichael mine or its related infrastructure. Vinod didn’t respond to emailed questions”.
Bloomberg News says it reviewed hundreds of pages of filings related to the Carmichael project, which is one of the group’s biggest undertakings. It finds that “the paper trail leads back to Vinod Adani”.
Also read: Hindenburg Spotlights an Offshore Adani-Related Entity That ED Had Linked to AgustaWestland Scam
The modus appears to be “using a maze of entities under his purview in at least four jurisdictions, Adani Group offloaded debt and received more than $1 billion of his money to help fund the project” as per the filings Bloomberg reviewed.
Bloomberg reports that the Carmichael project turned to Vinod in 2018 for financing when the environmental uproar and uncertainty about the made lender money hard to come by. It says that “hundreds of millions of dollars started to flow from two investment companies: Kommerce Trade & Service DMCC and Adani Global Investment DMCC. Both are based in the United Arab Emirates, and both are controlled by Vinod”.
The Hindenburg report had made this the central charge while highlighting Vinod Adani’s alleged role, that Vinod Adani “had moved billions of dollars in and out of Adani Group companies, seemingly to embellish share prices and financial results.” But at the time, the Adani Group only said that Vinod is part of the family shareholder group or the promoter group. It did not go any further, saying he’s not a manager at the group’s public companies or their closely held subsidiaries.
Bloomberg News said that while it had reported that Vinod Adani had a cabin in the office and spent time regularly, the Group’s statements about his role “obfuscate the true breadth of his involvement”. A report out on March 21 by S&P Global Ratings analysts said “any transactions with the brother and entities where he is a beneficiary should be disclosed as related-party transactions”. It added that Adani Group’s ratings could be cut if investigations uncover “serious wrongdoing” like previously undisclosed related-party loans or misreporting.
Adani Group said it “strongly rejects” the charges that it has not followed regulations and accounting standards.
But Bloomberg cites four legal experts it spoke to as saying that “siblings like Gautam and Vinod by definition are related parties, which warrants disclosure of all business deals”.
Who is Vinod Adani
Vinod Adani (74) is reported to be worth at least $1.2 billion, according to the Bloomberg Billionaires Index. He runs a family investment office in Dubai.
Over the years, he’s been involved in some of Adani Group’s most ambitious projects, “Carmichael is one of the longest-running examples,” says Bloomberg.
As more reports alleged that Vinod played a key role in the Adani Group’s foreign deals, the conglomerate maintained that Vinod did not hold “any managerial position in any Adani listed entities or their subsidiaries and has no role in their day to day affairs”, but on March 16, the Group said in a statement that the Adani Group and Vinod Adani should be seen as one.