As the Adani Group’s crisis gets deeper, more media attention is being directed at Vinod Adani, the older brother of the group’s founder Gautam Adani.

US investment firm Hindenburg Research has alleged that Vinod Adani is responsible for creating and managing a vast network of offshore shell entities meant for stock parking, market manipulation and laundering money, to help the conglomerate’s companies maintain their appearance of financial health.

However, despite the allegedly influential role Vinod Adani plays in the business group, including as a key negotiator for raising funds from the international market, he remains a mostly unknown figure for the public.

The group’s crisis

On January 24, Hindenburg Research, an American short seller, published a report alleging that the Adani Group is pulling off the “largest con in corporate history”. It claimed that the Indian conglomerate was involved in stock manipulation, accounting fraud and money laundering.

While the group rejected these allegations, its responses failed to assuage fears in the equity markets – leading to the conglomerate’s listed companies collectively losing around $140 billion in market value.

The crisis has hurt the group’s business plans, forcing it to prepay some of its debt and halt plans for intended acquisitions.

However, it is not only Gautam Adani, the group’s public face, who has drawn attention amid the crisis. Hindenburg’s report and subsequent findings by global media outlets such as Forbes and Bloomberg have shed light on the key role allegedly played by his elusive elder brother, Vinod Adani.

Vinod Adani, believed to be 74 years old, is widely reported to be working out of Dubai in the United Arab Emirates. While regulatory filings show he is a Cypriot national, his permanent residency is said to be in Singapore, Forbes reported. According to The Morning Context, he set up a textile mill near Mumbai in 1976, before moving to Singapore in 1989 and eventually to Dubai in 1994 – trading commodities such as sugar, oil and copper.

His name appeared in the International Consortium of Investigative Journalists’ 2016 Panama Papers leak, which detailed financial information for over 2 lakh offshore entities, in relation to a company he had established in the Bahamas in January 1994. Two months after setting up the company, he had requested a change in his name on the company’s documents from “Vinod Shantilal Adani” to his alias “Vinod Shantilal Shah”, the Financial Express reported.

According to Forbes, his net worth is at least $1.3 billion owing to his shareholdings in the Adani Group. This also made him the richest non-resident India in 2022.

Credit: Reuters/Dado Ruvic/Illustration
Credit: Reuters/Dado Ruvic/Illustration

Vinod Adani and his role in the Adani Group’s dealings has been discussed extensively in Hindenburg’s report. It mentioned Vinod Adani 151 times, even though he holds no formal position in any of its listed companies. In comparison, Gautam Adani was mentioned only 54 times.

The US firm alleged that Vinod Adani manages an expansive network of offshore shells that are meant for stock parking, stock manipulation and laundering money through Adani’s private companies into the listed companies’ balance sheets to maintain their appearance of financial health. “Vinod’s labyrinthian network of shells appears to serve several functions, including shuffling losses into private entities to boost reported earnings, and surreptitiously moving money to prop up entities in the group,” Hindenburg alleged.

Hindenburg claimed that its research had demonstrated how Vinod Adani and his associates had created dozens of entities in Mauritius having “little to no genuine corporate presence”, along with other entities in Cyprus, Singapore, the Caribbean and the United Arab Emirates. “Many of these entities later appear in suspect transactions, often funnelling assets into or out of the Adani Group companies,” the report alleged.

Hindenburg also claimed that many of these shells had “no obvious signs of operations”. “[But] despite this, they have collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals,” it added.

Similarly, American business magazine Forbes reported on February 17 that it had identified previously unreported transactions involving offshore funds linked to Vinod Adani that appeared to be designed to benefit the conglomerate.

The magazine also said it had found that Vinod Adani allegedly owned or has been associated with at least 60 entities in offshore tax havens including the Bahamas, the British Virgin Islands and the Cayman Islands.

Vinod Adani’s significant influence

On Thursday, Bloomberg reported that it was not Gautam Adani, but Vinod Adani and his wife Ranjanben who were the ultimate beneficiaries of seven entities linked to an open offer made by the conglomerate to shareholders of cement companies, Ambuja Cements and ACC, during their acquisition in 2022. The seven unlisted and interlinked companies are reportedly registered in the British Virgin Islands, Mauritius and Dubai.

While Vinod Adani and Ranjanben do not hold any managerial or top executive positions in any listed group companies, the conglomerate’s spokesperson had told The Morning Context in 2022 in this regard that the former is “is part of the promoter group of Adani [companies] and has been disclosed accordingly with the Regulatory Authority”.

According to Hindenburg, Vinod Adani had held several “official executive roles” in the group until at least 2011. As of 2009, Vinod Adani was the director of at least six group companies, a shareholder of Adani Enterprises, and member of Adani Power’s promoter group, Hindenburg claimed.

Opposition leaders protesting over the Adani row in parliament complex in Delhi. Credit: PTI
Opposition leaders protesting over the Adani row in parliament complex in Delhi. Credit: PTI

However, as part of a 2014 investigation into a power generation over-invoicing scandal, Adani Power had told the Directorate of Revenue Intelligence in 2017 that Vinod Adani “was not at all having any involvement with any Adani Group of companies”, Hindenburg pointed out.

Even while responding to Hindenburg’s allegations on January 30, the group denied Vinod Adani’s involvement in the conglomerate. “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,” the conglomerate said. “As such, these questions [raised by Hindenburg] have no relevance to the entities in the Adani portfolio and we are not in a position to comment on your allegations on the business dealings and transactions of Mr Vinod Adani.”

The group provided the same response to questions posed by Bloomberg, and did not respond to the Forbes report.

Therefore, Bloomberg suggested that Vinod Adani’s alleged connection to Adani Group’s acquisition of the two cement behemoths, without any leadership position in the conglomerate, demonstrates the extent of influence he holds in it.

A shadowy figure

However, despite this alleged sweeping influence within the group, Vinod Adani remains a mysterious figure. Bloomberg cited an unidentified person familiar with the conglomerates’ internal functioning to say that Vinod Adani is a key negotiator for the group to raise money from the international market.

RN Bhaskar, journalist and author of a recent biography on Gautam Adani and his empire, also told Bloomberg that “all overseas transactions are monitored closely by Vinod”.

Bhaskar had pointed this out in his book too. “Vinod remains actively involved with the group, especially when negotiating international finance and connections,” he wrote. “But he does not hold any formal position with the group.”

Yet, despite this key role, Bhaskar said he knew little about Vinod Adani.

In fact, so little is known about him that Forbes recently revised his brother Gautam Adani’s net worth down to $50.7 billion, after discovering that several entities previously believed to be his actually belonged to Vinod Adani.

Also read: Big picture: How the Adani crash unfolded and what it could do to the Indian economy