Vinod Adani - The Man Behind The Adani Group’s Offshore Deals (Morning Context).pdf

21/01/2023, 03:42 Vinod Adani: The man behind the Adani group’s offshore deals
chrome-extension://ecabifbgmdmgdllomnfinbmaellmclnh/data/reader/index.html?id=201641506&url=https%3A%2F%2Fthemorningcontext.com%… 1/8
themorningcontext.com /business/vinod-adani-the-man-behind-the-adani-groups-offshore-deals
Vinod Adani: The man behind the Adani group’s offshore deals
Nihar Gokhale ⋮ 21-26 minutes
In one of India’s largest ever merger and acquisition transactions—the Adani group’s deal to buy out Swiss
multinational Holcim’s stake in Ambuja Cements and ACC—one name stands out: Vinod Shantilal Adani.
The elder brother of Gautam Adani, Asia’s second richest man, Vinod has been something of an enigma in
the Adani group’s history. He is a citizen of Cyprus, a resident of Dubai and Singapore, and a director of
dozens of companies and trusts spread across at least six countries, including tax havens Mauritius and the
Cayman Islands.
He moved to Dubai in 1994, roughly a year after the group’s flagship, Adani Enterprises, was incorporated
(Adani Exports at the time), and has never been known to hold any office in Adani companies since. This
relationship is something the Adani group has attested to. In 2017, the group submitted before a
government authority that Vinod Adani was “not at all having any involvement with any Adani group of
companies”. This was in the context of a money laundering investigation, which we will get to shortly.
The Adani group’s statement came as a surprise, given that Vinod Adani’s companies had invested
hundreds of crores of rupees in its real estate ventures, held significant stakes in listed Adani firms, owned
the group’s Australian railway and port businesses and executed engineering contracts for Adani’s power
projects in India.
And now Vinod Adani’s role in the group has assumed greater significance. Disclosures by ACC, Ambuja
Cements and Adani companies to Indian stock exchanges, as well as information from the Mauritius
government’s corporate registry, show that companies with Vinod Adani as director are linked to the open
offer made by the Adani group to shareholders of the two Indian cement makers. The same companies also
received a $2.5 billion payout from France-based Total in 2021, when it bought a 20% stake in Adani Green
Energy. In its press statement announcing the purchase, Total said it bought this stake “from Adani Group”.
So, is Vinod Adani a part of the Adani group or not? We took a look at all the known transactions between
companies linked to him and Adani entities in India, and how these may have helped the group.
In response to The Morning Context’s queries on Vinod Adani’s association with the Adani group, a group
spokesperson said: “Please note that Mr Vinod Adani is part of the promoter group of Adani cos and has
been disclosed accordingly with the Regulatory Authority. Mr Vinod Adani is fully compliant with the
applicable laws.”
Understanding Vinod Adani’s association with the Adani group would not just help throw light on the
workings of one of India’s top conglomerates, which spans subsidiaries and associate companies across
continents. It could also have legal consequences for the group, as an ongoing customs case against
Adani’s power subsidiaries shows. The case involves accusations that the group laundered nearly Rs 5,500
crore outside India through entities that supplied equipment to Adani Power subsidiaries and were linked to
Vinod Adani.
It was in response to this case that the group claimed that Vinod Adani had nothing to do with it, and hence
its deals with these entities were kosher. An adjudicating authority dismissed the case in favour of Adani in

2017, but an appeal by customs is currently being heard before the Customs, Excise and Sales Tax
Appellate Tribunal. The nature of the relationship between Vinod Adani and the Adani group is one of the
points on which the case could turn.
“In general, offshore structures including companies and trusts, allow companies to reap tax and legal
efficiencies. These are clever structures that pass muster of laws on paper, but whether it follows the law in
spirit is hard to say,” says a corporate lawyer familiar with structuring international entities.
“It is not against the law but is an added advantage to any company. It helps to have someone outside the
country operating these offshore structures, someone who is not even a non-resident Indian but a non-
resident altogether. And someone whom you can trust not just on paper [through contracts] but something
more than that.”
Keeping a low profile
For years, Vinod Adani has been an elusive figure. He also goes by the names Vinod Shah and Vinod
Shantilal Shah. Not much is known about him other than a few advertorials that appeared on 9-10 May
2016 in Firstpost and The Economic Times. These state that Vinod had faced “hardships during his
childhood”. He studied for a master’s in engineering in the US, returned to India “equipped with technical
skills, fluent (sic) English and a natural ability to make new friends and deal with strangers”.
He set up a textile mill at Bhiwandi near Mumbai in 1976. In 1989 he moved to Singapore when “the trading
business added new commodities to its portfolio” and then in 1994, moved to Dubai “for further expansion to
middle-eastern countries”. He is described as a devout Jain who once funded the pilgrimage of 1,200
people to Sammed Shikharji, a Jain pilgrimage site in Jharkhand.
The advertorials read like hagiographies and there is no disclosure on who paid for them. The Firstpost
piece, titled “Humility, Modesty, Grace: The story of Vinod Shantilal Adani”, begins with the words: “In times
of lies and corruption, rare is the number of people who live by their words and choose integrity and loyalty
over profit-earning and selfish needs. Vinod Shantilal Adani is one such man, rich in values that he has
inherited from his family and practiced himself. His integrity determines his demeanor and guides his
actions, both in his personal and professional life.”
What is also not clear is when exactly Vinod Adani became a citizen of Cyprus, a Mediterranean island
nation known as an offshore financial centre offering low taxes and corporate secrecy to global firms and,
until 2020, citizenship by investment. His citizenship was revealed to the public in 2018 in documents
unearthed in the Pandora Papers leak. Other companies and trusts with which Vinod Adani has been
associated also happen to be in such jurisdictions: Dubai (in particular its Free Zone area), Singapore,
Mauritius, Cyprus, the Cayman Islands and the British Virgin Islands.
For long, there was only one publicly available photo of Vinod Adani, in which he is seen holding a memento
of the Indian flag in a glass case. In May 2018, he was photographed as a guest at the “India-UAE Business
and Social Forum 2017-18”, where he was seen presenting awards to Anand Ajay Piramal, Sania Mirza,
Amal Clooney, among others.
In September 2021, Vinod Adani was featured as one of the 10 richest people in India by IIFL Wealth-Hurun
India Rich List, with a net worth of Rs 1.31 lakh crore, ahead of Kumar Mangalam Birla (Rs 1.2 lakh crore).
His wealth had tripled in one year; he was the 20th richest in the previous year’s report.

The Adani brothers (from L to R) Vasant, Vinod, Mahasukh, Gautam and Rajesh. Source: Vinod
Adani on Facebook
Taking the offshore route
On 23 May, a week after Adani group and Holcim’s announcement of the deal, ACC and Ambuja Cements
issued advertisements in newspapers with details of their open offers to shareholders.
Both ads mention the same acquirer: Endeavour Trade and Investments Ltd, a company incorporated in
Mauritius, which the ads said “belongs to the Adani Group”. The ads further said that Endeavour is
promoted by Acropolis Trade and Investments Ltd, another Mauritius company whose ultimate ownership is
“held by certain members of the Adani family”.
According to the online corporate registry database of the Mauritius government, Vinod Adani is one of the
four directors of Acropolis, and has been one since the company’s incorporation in April 2017. Subir Mittra,
CEO of the Adani Family Office, is another director, appointed last June. The other directors belong to
Amicorp (Mauritius) Ltd, a corporate and legal services company. The addresses of Endeavour and
Acropolis are the same as Amicorp’s, on the sixth floor of an office building in Ebene, an IT hub close to the
national capital, Port Louis.
The Mauritius database does not provide a list of owners or any details of transactions (unlike India’s
registrar of companies database, in which all financial submissions by companies are available to the
public).
This is not the first time that we’ve heard of Acropolis.
In 2021, Total picked up a 20% stake in Adani Green Energy for $2.5 billion. Stock exchange filings
disclosed that Total had in fact acquired Universal Trade and Investments and Acme Trade and
Investments, both incorporated in Mauritius, which held 16.4% and 3.6% of Adani Green Energy,
respectively. The disclosures revealed that Total acquired the companies from another Mauritius company
called Dome Trade and Investments. The Mauritius registry shows that Vinod Adani is a director of Dome. A

year earlier, Dome Trade and Investments had disclosed in another filing that it was a 100% subsidiary of
Acropolis.
In both transactions, the Adani group could carry them out without having to follow Foreign Exchange
Management Act norms and Reserve Bank of India’s guidelines on fair market value of transactions. They
also avoided paying tax on the sale of the stake.
“Since both the parties were non-resident entities from the Indian perspective, hence they were not
governed under RBI rules or Indian taxation,” says a corporate lawyer. The only legal disclosure
requirements are from the capital markets regulator, the Securities and Exchange Board of India, as it
follows an expansive definition of promoters and persons acting in concert, the lawyer adds.
Indeed, Mauritius and Dubai-based entities have long held significant stakes in Indian listed entities of the
Adani group. Universal Trade and Investments, until its acquisition by Total, held significant stakes as a
promoter group firm in all listed companies of the Adani group other than Adani Power. Emerging Market
Investment DMCC, a Dubai-based company owned by Vinod Adani, owns a 5% stake in Adani Power and
4% stake in Adani Ports and Special Economic Zone.
Vinod Adani is also the sole director in two Singapore-based companies—Carmichael Rail and Port
Singapore Holdings Pte Ltd and Abbot Point Port Holdings Pte Ltd—that wholly own the Adani group’s port
and rail assets in Australia. The port assets were earlier with APSEZ, which divested them in 2013 as part of
its corporate restructuring, during which the company said that the assets were moving to “the Adani family”.
Interestingly, the Adanis were said to have been in talks with investors to sell a stake in the port business,
according to a report by the Institute for Energy Economics and Financial Analysis. Divesting them from
APSEZ to foreign entities under Vinod Adani would also avoid the need to comply with Indian tax or foreign
exchange laws.
Critics of Adani’s Carmichael coal mining project, like IEEFA, have targeted the complex ownership
structure of the rail and port assets, which leads to a web of companies and trusts in the Cayman Islands
and the British Virgin Islands. The institute has noted in its reports that the corporate structure of the port
project was “designed to legally minimise tax” and that “risk assessment and analysis of Abbot Point and the
Carmichael proposals is not helped by the opaque nature of the structure”.
“I think there’s a national security issue here,” IEEFA analyst Tim Buckley had told the Australian
Broadcasting Corporation in 2017, in a story that first revealed that the ownership led up to a British Virgin
Islands company. “[Abbot Point] one of our biggest ports, it’s owned in this opaque structure through
multiple tax havens,” he said.
The Cyprus connection
Other than holding stakes in Adani firms, Vinod Adani is director of three firms in Cyprus—Vakoder
Investments Ltd, JM Asian Cyprus A Ltd and Neptune Asian Cyprus B Ltd—that have invested nearly Rs
2,300 crore in Adani’s real estate ventures in India, according to the government of India’s foreign direct
investment inflow statistics and the Cyprus government’s corporate registry. About Rs 1,215 crore went into
Adani Estate Pvt. Ltd and Adani Land Developers Pvt. Ltd. The latter’s subsidiaries include Shantigram
Estate Management Pvt. Ltd, named after the 600-acre Shantigram township being developed by the Adani
group on the outskirts of Ahmedabad. Shantigram Estate Management also owns Belvedere Golf and
Country Club Pvt. Ltd, a golf club planned within the township.

Another Rs 1,100 crore was invested into Brahma City Pvt. Ltd and Brahma Center Development Pvt. Ltd,
which are developing the 13-acre Brahma City township in Gurugram. The project is a joint venture with the
Brahma Group, a New York-based real estate company that invests in projects in India.
Corporate records of Adani Estate and Adani Land Developers show that the investments were in exchange
of compulsorily convertible debentures, i.e., debt instruments that pay an interest and eventually convert to
equity. According to an income tax assessment order available online, JM Asian Cyprus and Neptune Asian
Cyprus were earning 12% interest on the CCDs.
According to a Mumbai-based lawyer specializing in international taxation, a low withholding tax on interest
makes Cyprus the preferred country for routing debt into Indian companies. And India has a double taxation
avoidance agreement with Cyprus that allows entities in that country to pay tax in one of the jurisdictions
only.
“There is no organic interest among Cyprus businesses to invest in India. It has been commonly observed
that real estate companies raise debt from abroad through Cyprus-based entities,” the lawyer says. Indeed,
government statistics show that Cyprus was the second largest source of foreign direct investment into
India’s real estate sector for 20 years up to December 2020. “The Adani group’s entities there are following
the same logic.”
The money laundering allegation
In 2010, firms owned by Vinod Adani in Dubai and Mauritius were suppliers of power generation equipment
(boilers, turbines and generators) to Adani Power’s supercritical thermal power plants in Maharashtra and
Rajasthan. His firm also supplied power transmission equipment (cables, insulator discs, etc.) to an Adani
Power transmission project in Maharashtra.
Information on these transactions was revealed in show-cause notices issued by the Directorate of
Revenue Intelligence—the investigative arm of the customs department—in 2014, as well as an
adjudication order in 2017, in which Adani group also provided information on its transactions with Vinod
Adani’s companies. Show-cause notices are similar to chargesheets and present all the evidence gathered
in an investigation. While the adjudication order rejected the DRI’s interpretation of its findings (which we’ll
come to shortly), the facts of the case were not in dispute.
In 2010, when Adani Power was developing thermal power plants in Kawai, Rajasthan, and Tiroda,
Maharashtra, its subsidiaries floated international tenders for an engineering, procurement and construction,
or EPC, provider who could source the equipment and design and install the units. According to Adani
Power, both bids were won by Electrogen Infra FZE, a Dubai-based company. Vinod Adani was appointed
as a director in that company after the bids were won. An investigation by DRI found that the company was
a subsidiary of Mauritius-based Electrogen Infra Holdings, of which Vinod Adani was a director. Further,
Electrogen Infra Holdings was owned by a web of companies leading up to Asankhya Resources Family
Trust, a foreign entity of which Vinod Adani was the settlor.
The DRI found that although the contracts were awarded to the Dubai-based entity, the actual equipment
was shipped from China to India. And, the amount charged by the Dubai entity to Adani Power subsidiaries
was two times the actual cost of equipment.
The DRI’s case was that Vinod Adani and the Adani Power subsidiaries had conspired to inflate the prices
so that the excess money to the tune of Rs 4,000 crore could be laundered outside India. Power projects

are allowed to recover the cost of equipment from the price they charge for selling the electricity. So, in
effect, electricity consumers had paid an excess price, which went to entities controlled by Vinod Adani.
Through Electrogen’s bank statements, the DRI found that most of the sum earned by it from Adani Power
was transferred to the Mauritius company.
When the DRI summoned Vinod Adani as part of its probe in 2013, he responded that he had quit
Electrogen Infra FZE and hence did not have any records.
The DRI noticed a similar invoicing pattern with power transmission equipment supplied by Electrogen Infra
FZE to Maharashtra Eastern Grid Power Transmission Co. Ltd, at the time a wholly owned subsidiary of
Adani Enterprises, in which it claimed the invoices were inflated by Rs 1,500 crore.
The Adani group disagreed with the DRI’s charges, saying that its total project cost was within government
guidelines and comparable to similar projects. And that the contract to Vinod Adani-controlled entities was
not just to supply equipment but to undertake all works related to installing the projects, which explained
why the price was higher than the cost of equipment.
In response to The Morning Context’s questions related to this case, the group spokesperson said: “With
regard to DRI matter, the Adjudicating Authority of DRI after examining the matter in detail, passed an order
in favour of the Adani Group. The matter is presently sub judice at Appellate Tribunal.”
‘No involvement with Adani group’
During proceedings before the DRI’s adjudicating authority (which hears the investigators and the accused
and passes a final decision along with penalties if any), Adani Power submitted that Vinod Adani “had his
own businesses and he was not at all having any involvement with any Adani group of companies”. It added
that Vinod Adani had “some shares in Adani Enterprises Ltd in his personal capacity with effect from 1
September 2009”.
The company said that Vinod Adani had not been a resident of India for 23 years and “he was also having
permanent residency of Singapore”. And that Vinod was “a business entrepreneur and he was doing
independent business of Real Estate Investment/ Trading, Scrap Trading, Commodity Trading and Financial
Market Investments/ Trading.” It said that “merely because Shri Vinod Shah happened to be the brother of
the promoters and/or directors of APL [Adani Power Limited] had not influenced the price.”
The adjudicating authority refuted this claim and in its order held that Electrogen Infra FZE and Adani Power
subsidiaries were related parties through Vinod Adani. But it said that the transaction was at “arm’s length”,
and as a result, dismissed the case in 2017.
Vinod Adani had also argued before the DRI adjudicating authority that under India’s customs law, no
penalty can be imposed on an entity outside the territory of India. The DRI adjudication authority agreed
with this.
In a separate order, the DRI adjudicating authority also dismissed the case related to import of power
transmission equipment. The customs department appealed against both orders, which are now being
heard at the Customs Excise and Service Tax Appellate Tribunal.
Interestingly, Vinod Adani’s indirect stake in listed Adani firms came to light only two years later. On 8
February 2019, the government of India enforced an amendment to the Companies Act that requires

companies to disclose individuals who are “significant beneficial owners”. This means they either hold more
than 10% of shares or have interest in entities that hold such a quantity of shares. All the Adani listed
companies disclosed Vinod Adani as an SBO through promoter entities such as the S.B. Adani Family Trust,
Gautam S. Adani Family Trust, Rajesh S. Adani Family Trust, Adani Tradeline LLP, Adani Properties Pvt.
Ltd, Adani Rail Infra Pvt. Ltd and Adani Trading Services LLP.
How does the group benefit?
There could be several ways in which the Adani group benefits from Vinod Adani’s activities abroad.
Going by the DRI’s show-cause notice, Vinod Adani’s presence abroad serves to direct money from Adani
group entities to foreign jurisdictions that are tax-free and also offer secrecy; financial statements are not
made public. So there is no way to account for how the funds have been utilized—whether they are used for
the family’s personal purposes or reinvested in India through other vehicles.
We know that many Mauritius-based entities have invested significant sums into listed Adani stocks,
shrinking their free float. The Adani family has also managed to finance its rail and port projects in Australia
and real estate projects in India. How these ventures were financed has always been a subject of interest.
In theory, even group chairman Gautam Adani can own and control entities abroad that can avail tax
benefits or act as suppliers. But as we saw in the DRI case, the Adani group argued that Vinod is an
independent businessman with no connection to the Adani group other than being a member of the
promoter family.
The Income Tax department had issued a show-cause notice claiming that the Dubai entity and Adani
Power were “associated enterprises” under transfer pricing rules. If the claim had been upheld, then
Electrogen’s income would have been added to that of Adani Power. The group disagreed with this. The I-T
department, in its final assessment in 2016, upheld the company’s contention that the two were not
associated enterprises. This order was cited by the DRI adjudicating authority in its finding that the
transactions were at arm’s length, although it did say that the two companies were related.
Well, one can say for sure that Vinod Adani and the Adani group are no longer playing in the shadows.
Nihar Gokhale leads our Chaos coverage at The Morning Context. Nihar writes on the environment, the
economy and resource conflicts in India. He has reported from across the country on everything from
displacement, pollution and environmental violations to land regulation, corruption and human rights. He
was earlier associate editor at Land Conflict Watch, and his work has appeared in Scroll, The Wire,
IndiaSpend, The Caravan and Mongabay India.

Vinod Adani - The Man Behind The Adani Group’s Offshore Deals (Morning Context).pdf

Recommended

Recommended

More Related Content

Similar to Vinod Adani - The Man Behind The Adani Group’s Offshore Deals (Morning Context).pdf

Similar to Vinod Adani - The Man Behind The Adani Group’s Offshore Deals (Morning Context).pdf (20)

More from Hindenburg Research

More from Hindenburg Research (20)

Recently uploaded

Recently uploaded (20)

Vinod Adani - The Man Behind The Adani Group’s Offshore Deals (Morning Context).pdf