The Wire Staff 
New Delhi: The elusive low-profile elder brother of Indian tycoon Gautam Adani had a central role in expanding Adani Group firms, with an alleged web of companies in various offshore territories that have apparently not been disclosed to regulatory authorities, Forbes magazine reported on Friday.
Vinod Shantilal Adani had been named as one of the main actors operating behind the scenes in the report published by US-based short-seller Hindenburg Research, which accused the Adani Group of widespread accounting fraud and stock manipulation. Since the report’s publication on January 24, Adani Group’s listed firms have lost $120 billion in market value.
In the Hindenburg report, the 60-year-old businessman was described as being behind a “vast labyrinth of offshore shell entities” that had “collectively moved billions of dollars into Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals”.
In a detailed reply to Hindenburg, the Adani group had dismissed all allegations and stated that, complying with all local laws, it had made the necessary regulatory disclosures. The Adani Group had also asserted that Vinod Adani did “not hold any managerial position in any Adani listed entities or their subsidiaries and has no role in their day to day affairs”.
In the article published on February 17, Forbes wrote about a previously undisclosed role of Singapore-based Pinnacle Trade and Investment Pte. Lte, which was “indirectly controlled” by Vinod Adani in allegedly pledging Adani Group promoter stocks for a loan from Russia’s VTB bank.
Forbes claims that Pinnacle had entered into a loan arrangement with Russia’s second-largest VTB bank in 2020. “By April 2021, Pinnacle had borrowed $263 million and lent out $258 million to an unnamed related party,” said the report.
As per Singaporean filings, Pinnacle offered two investment funds as guarantors for the loan from the Russian state-owned bank. These investment funds were identified as Afro Asia Trade and Investments Limited and Worldwide Emerging Market Holding Limited.
The Forbes articles linked two Indian stock exchange filings in June 2020 and August 2022, showing that Vinod Adani is the “ultimate beneficial owner of Mauritius-based Acropolis Trade and Investments Limited, which in turn owns 100% of Worldwide Emerging Market Holding Limited”.
The article claimed that Afro Asia Trade and Worldwide hold $4 billion worth of promoter stock in Adani Enterprises, Adani Transmission, Adani Ports and Adani Power. Forbes also noted that as per the investment tracking website Trendlyne, Afro Asia Trade and Worldwide do not hold any other securities.
According to the Forbes report, this meant that Pinnacle’s loan from the Russian bank was “secured, effectively, by the value of the funds’ Adani company shares”. “Neither fund has disclosed share pledges in Indian financial filings for the four Adani companies they’re invested in,” it said.
Forbes wrote that neither the Adani Group nor Vinod Adani responded to a request for comment.
Incidentally, an Indian securities expert who spoke with Forbes, but did not want to be named, was quoted as saying that Pinnacle pledging the investment funds, rather than their Adani company shares, may exempt the funds from the obligation to disclose the pledged shares.
In another report related to Adani stock being used as collateral, Bloomberg news agency wrote that the Norwegian pension fund KLP’s decision to divest all its shares from Adani Green was due to the firm’s stock being pledged for a credit facility to finance the Carmichael coal mine in Australia.
The news agency referred to a public filing dated February 10 which noted that Adani was pledged stock from Adani Green to SBICAP Trustee Company, a unit of State Bank of India, as collateral for a credit facility to develop the Carmichael coal mining project in Australia. The stocks of Adani Green, along with those of Adani Ports and Special Economic Zone (APSEZ) and Adani Transmission Ltd, were pledged were avail a $300 million letter of credit provided by SBI.
In an interview with Bloomberg, KLP’s head of responsible investing, Kiran Aziz, said that KLP had blacklisted coal from its portfolio, so any indirect financing of the Carmichael project would represent a “breach of our commitments”.
In June 2021, KLP divested all its from Adani Ports and SEZ Limited over its links to Myanmar’s military for a project to develop a container terminal in Yangon. Four months later, Adani announced that it was withdrawing from the container terminal project.