India Finance
Unravelling Adani’s Network of Offshore Investors: Part 1
Jul 29, 2021
AdaniWatch describes the complex web of offshore investors in Adani Group companies

On 14 June 2021, share prices of Adani Group companies listed on India’s stock exchange fell dramatically, wiping out US$11 billion in value in an hour of trading after a media report that accounts of three offshore investors in the Adani Group had been frozen. While the share prices have recovered, the identities and functions of obscure investment funds based in tax havens across the world that are heavily invested in the Adani Group remain a matter of public interest in India. Opposition parties have called for a government probe into the offshore entities. And on 28 July, Al Jazeera ran a story referring to the ‘murky dealings’ of four such funds.

In this article, based on analysis of thousands of corporate records across multiple jurisdictions, AdaniWatch presents an exclusive look into a complex network of companies that are behind the investors into the Adani Group. Some share key corporate characteristics such as address, management company, secretary, contact person, contact number and email address, and some are linked to businessmen under investigation by Indian enforcement agencies.

Stock prices of companies in the Adani Group had a rollercoaster ride on 14 June 2021, after a report in the Economic Times (ET) stated that India’s National Securities Depository Limited (NSDL) had frozen accounts held by three Mauritius-based investment funds that have invested heavily in the Adani Group. The funds are Albula Investment Fund, Cresta Fund and APMS Investment Fund. The report alleged that these entities would not be permitted to trade in shares of Adani Group companies. This led to a precipitous fall in the share prices of Group companies, with billions of dollars in notional value wiped out in a few hours of trading.

Though the ET article turned out to be misleading on certain counts (the freeze on particular sub-accounts of these three funds had been in place since June 2016), and for reasons that had nothing to do with the Adani Group, the news report renewed attention towards a clutch of investor companies known as FPIs or Foreign Portfolio Investors that have invested in Adani Group companies.

The stock prices of the companies recovered after several public statements by the Adani Group that sought to assuage apprehensions that there was something untoward about the investments by the Mauritius-based FPIs. On the day of the ET report, the Adani Group described it as ‘blatantly erroneous and done to deliberately mislead the investing community,’ adding that the trading accounts of the FPIs named in the ET report had not been frozen. Another media statement subsequently posted on the Group’s website noted that ‘the FPIs in question have been investors in Adani Enterprises Ltd (AEL) for more than a decade,’ and that ‘(d)emergers have resulted in the ownership mirroring in the portfolio companies.’ The statement went on to explain that each of the Adani Group’s listed companies has been demerged from AEL over the years, and hence, the FPIs’ investments in AEL carried over to an ownership stake in the demerged companies.

On 12 July, Adani Group chairman Gautam Adani addressed the contentious issue at the annual meeting of shareholders of the Group’s listed companies. The Press Trust of India news agency reported that Adani said that ‘we are inter-generational holders of equity.’ Calling the media reports ‘reckless and irresponsible,’ he said it caused unexpected fluctuations in the market prices of Adani stocks.

‘Unfortunately, some of our small investors were affected by this twisted narrative which seemed to imply that companies have regulatory powers over their shareholders and that companies can compel disclosure,’ he added.

The episode has triggered a series of questions. Two days before the ET report, Sucheta Dalal, a senior Indian investigative journalist based in Mumbai had cryptically tweeted: ‘… another scandal hard to prove outside the black box of information available with SEBI tracking systems is the return of an operator of the past who is relentlessly rigging prices of one group. All through foreign entities! His specialty & that of a former FM. Nothing changes!’

(SEBI is the acronym of the Securities and Exchange Board of India, the main regulator of the country’s financial markets, while FM presumably refers to Finance Minister.)

While the journalist’s tweet named no one, other media perceived her tweet to be referring to the Adani Group, whose stocks have risen by phenomenal proportions in comparison to peers and competitor groups, despite the havoc wreaked on the Indian economy by the pandemic-induced recession.

(Story continues below)

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In the days that have followed, a series of pointed questions about these Mauritius-based entities that are invested in the Adani Group’s companies have been raised by opposition Members of Parliament in India, including those belonging to the Trinamul Congress and the Indian National Congress.

There is much more to the story about the entities registered in so-called ‘low tax’ offshore jurisdictions around the world (also known as tax havens) that have invested heavily in the Adani Group, and this is the subject of this two-part series of articles.

On 19 July, in response to a question raised in Parliament, the Government of India stated that several companies in the Adani Group were under investigation by the SEBI and by the Directorate of Revenue Intelligence (DRI, that investigates violations of customs law). In a clarification, the Adani Group said that it has not received any communication from the SEBI and that a DRI show cause notice it had received was from five years before.

The methodology in the analysis that is presented is as follows. I went through financial disclosures made by the six listed companies of the Adani Group going as far as back as public records are available and noted the FPIs (Foreign Portfolio Investors) and FIIs (Foreign Institutional Investors) listed as holding stocks in the companies. I identified ten such companies based out of low-tax offshore jurisdictions that are, or were until recently, heavily invested in Adani Group companies. Thereafter, I tracked the foreign investors and companies linked to them by using Legal Entity Identification data and drew out maps of all the companies across various jurisdictions that are, or were, associated with these investors in the Adani Group.

These investments in Adani Group entities by investor companies based in jurisdictions such as Mauritius and the British Virgin Islands do not in themselves constitute anything wrong or prima facie illegal. As far as their public appearances are concerned, most of these companies are investment funds that perform a legitimate business, namely, pooling funds from individuals and entities with high net worth and investing the money in financial markets with the intention of increasing the market prices of their clients’ assets.

However, a closer look at these investors in the Adani Group leads to two key observations. The first is that in a majority of cases, more than 90% of the funds held by the investor company are invested in Adani Group companies. The second is that these investor companies have invested their funds heavily in the Adani Group and subsequently left their holdings largely unchanged for unusually long periods.

These characteristics of the investments of the ten companies in the Adani Group raise questions about the nature of the investments. Typically, investment funds are geared to minimise risks for their clients. They typically maintain a highly diversified portfolio, dividing their funds across many different investments, and they are typically highly sensitive to sharp changes in stock prices. Investment funds tend to exit investments that see frequent fluctuations in their market prices. For such a fund to heavily invest only in one corporate group, and to continue to hold that investment despite huge fluctuations in that group’s stocks, is unusual to say the least.

Fund managers usually sell their holdings when they sense that market conditions could turn unfavourable for the company due to, say, increased competition from other companies in the peer group, lower than expected profit margins for the company, high debt ratios, negative or no reports on the company from independent analysts, changes in government policy related to the company’s core business area, or regulatory actions against the company. Interestingly, none of these FPIs are holding shares of APSEZ (Adani Ports and Special Economic Zones), the only company in the Adani stable that has received regular coverage by independent analysts and in which investments have been made by Domestic (Indian) Institutional Investors (or DIIs) like mutual funds and by financial institutions. The other five Adani Group companies in which the FPIs/FIIs are heavily invested have not been covered regularly by independent analysts; nor have substantial investments been made by DIIs.

Publicly listed companies that put up their shares for sale on Indian stock markets are required to maintain a Public Holding of a minimum 25%. This means that at any point of time, at least a quarter of the company’s shares must be available for sale on stock exchanges and not held by the company’s owners or promoters. As we shall see, for the listed companies in the Adani Group, a combination of these FPIs holds the majority (in the case of APSEZ, none of these FPIs have made any investment) of their free-float and the actual public holding in the six listed Adani Group companies averages only 3.74% – a situation that could affect fair price discovery of the shares of these companies.

With these observations in mind, a number of questions arise. Who is the ultimate beneficiary owner of each of the foreign investor companies? Are they indeed bona fide independent investors, who for some reason have chosen to invest most of their funds in companies of the Adani Group and have held onto their positions for several years? The answers to these questions can be found only by official authorities with investigative powers. Indian regulators such as SEBI and investigation agencies such as the Enforcement Directorate (ED, which investigates cases of money laundering and illegal transactions in foreign currency) are empowered to seek documents from these companies that indicate ownership details, and in case they fail to receive the information, SEBI and ED are empowered to call for these details from the authorities in the jurisdictions where they are located.

In the analysis that follows we lay out all the publicly available information about these companies. This information would form a starting point for any attempt to lift the corporate veil and determine who are the individuals and entities that ‘truly’ own stakes in the investor companies that have such a significant holding in major Adani Group companies. In each of the two articles in this series of articles, I deal with five of the ten companies that are invested in the Adani Group.

The first five entities turn out to be interlinked and owned ultimately by the same entity – a company named MIH International Limited, (previously named Monterosa Investments Holdings Limited) registered in the British Virgin Islands. This company, in a twist worthy of a James Bond story, figures in another high-profile case relating to a billionaire diamantaire who is on the run and wanted by Indian authorities. More of that later. First, let me plough through the details of five of these investor companies.


APMS Investment Fund Limited

As of 31 March 2021, APMS Investment Fund Ltd, an entity registered in Mauritius in 2005, holds eleven stocks with a net worth of Rs 13,180.6 crore (US $1.7 billion). Out of the total amount involved, Rs 12,669.4 crore, or 96.12%, is invested in four listed companies: Adani Green Energy Limited (AGEL), Adani Transmission Limited (ATL), Adani Total Gas Limited (ATGL), and Adani Enterprises Limited (AEL). Legal Entity Identification (LEI) relationship data that lists direct subsidiaries and parent companies of each identified entity tells us that APMS has five direct subsidiaries: Florence Investment Limited, Delphi Investment Limited, Roseburg Inc, CGI Investment Limited and Starbridge Finance Limited. It is by looking at these subsidiaries that we can learn about who ultimately owns the entire chain.

Delphi Investment Limited, CGI Investment Limited and Starbridge Finance Limited are in fact, according to LEI data, ultimately consolidated by MIH International Limited in the British Virgin Islands.

Structure and corporate links of Adani Group investor APMS

There is another point to note about APMS. According to the LEI data, APMS’s previous name was Mavi Investment Fund Limited. In its previous avatar too, the entity was invested in the Adani Group’s companies, but not exclusively.

AEL’s Red Herring Prospectus published in March 2010,when the company conducted a qualified institutional placement (QIP) to raise capital, showed Mavi as holding 2.01% of the company’s shares. Filings to SEBI by APL (Adani Power Limited) and APSEZ (Adani Ports and Special Economic Zone) show that in the last quarter of the financial year 2010-11, Mavi acquired 1.3% and 1.42% of the shares respectively of the two companies.

Mavi has been fined multiple times by SEBI, the Indian market regulator, for alleged non-compliance with regulations. In one incident in 2010, without accepting or denying the charges made by SEBI, Mavi sent a suo motu proposal to pay a penalty of Rs one million (about US $13,000) to settle its dispute with the regulator. In 2011, SEBI barred Mavi from participating in Indian bourses for alleged manipulation of the market prices of stocks using GDRs or Global Depository Receipts. Around the same time, journalist Sucheta Dalal revealed that a controversial stockbroker named Nirmal Kotecha, who has been accused of market manipulation by the ED, was associated with Mavi. The allegations do not appear to have been denied.

SEBI guidelines for FIIs/FPIs mandate that ‘Beneficial Owners (BOs) are the natural persons who ultimately own or control an FPI and should be identified in accordance with Rule 9 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (hereinafter referred as PMLA Rules). FPIs are required to maintain a list of BOs and should provide such lists of their Bos to SEBI in a prescribed format.’

The Prevention of Money Laundering Act or PMLA, 2002, (Act 15 of 2003) defines a beneficial owner thus: ‘The beneficial owner is the natural person or persons who ultimately own, control or influence a client/or persons on whose behalf a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement.’

In 2011, SEBI asked Mavi to submit the names of the ultimate beneficial owners of the fund. Mavi failed to do so. Instead of submitting the names of natural persons, it allegedly provided the names of legal entities who were investors/founders of Mavi and claimed that it accepts funds only from qualified investors like regulated financial institutions/banks, licensed intermediaries, and institutional investors from Financial Action Task Force (FATF) acknowledged jurisdictions, and not natural persons. The SEBI board accepted Mavi’s claim in 2013 and eventually lifted the ban imposed on the fund.

In March 2013, Mavi sold its entire stake of 17.1 million shares in APL to Vinod Adani (Brother of Gautam Adani, the Group chairman) in three separate block deals at prices varying between Rs 48 and Rs 47.25 per share (with a face value of Rs 10). Mavi had purchased the shares in February 2010 for Rs 108 a share. Before that, in the same month, it had sold 4.3 million shares of the same company to Albula Investment Fund Ltd, another entity based in Mauritius.


Albula Investment Fund Limited

Albula, an entity registered in Mauritius in 2007, shares the same address, management company, secretary, contact person, and contact number and email address as those of APMS. It has three direct subsidiaries, DMCC Investments Limited, Amber Finance Limited, and Roundabout Finance Limited. Of these three, Roundabout Finance Limited is ultimately consolidated by MIH International Limited.

Albula started investing in the Adani Group from 2011-12 onwards. By March 2013 it was holding 1.54% of AEL. On 31 March 2021, it was holding 2.21% of AEL, 2.23% of APL, 1.23% of AGEL and 1.91% of AGTL. On that date, Albula held 18 stocks with a net worth of Rs 11,898.4 crore (US $1.6 billion), of which Rs 11.237.5 crore, or 94.44%, was held in four Adani Group Companies: AEL, ATL, AGEL and ATGL.

In December 2009, in two separate block deals, Albula purchased 71,78,418 shares of Adani Power from Mavi and Lotus Global – more on Lotus Global later in the article.

Structure and corporate links of Adani Group investor Albula

Albula and Cresta, another Mauritius-based fund, were both incorporated the same year that APSEZ was listed.


Cresta Fund Limited

MIH International Limited is the direct and ultimate beneficiary of Cresta Fund Limited according to LEI data. That is, Cresta Fund is a direct subsidiary of MIH International. Cresta, registered in Mauritius in 2007, also shares the same address, management company, secretary, contact person, and contact number and email address as APMS and Albula.

On 31 March 2021, Cresta held ten stocks with a net worth of over Rs 12,315.7 crore (US $1.65 billion), of which 98.2% or Rs 12,094 crore was parked in three Adani Group companies – ATL, AEL and ATGL. The entity holds some shares of AGEL as well.

Cresta started investing in the Adani Group in 2013-14. It started with a big bang. By March 2014, Cresta was holding 1.84% of AEL. AGEL’s Red Herring Prospectus of 2014 shows that Cresta was holding almost 2.48% shares of the company even before it was listed on the stock exchange.

According to the information memorandum submitted by ATL to the Bombay Stock Exchange before the company was listed in 2015, Cresta, Elara, Gudami, Albula and Emerging India Focus funds together held 10.22% shares in ATL. I shall look at Elara and Gudami in the second article in this series.

Investors in Adani Transmission Ltd, before listing in 2015

Source: p.52 of the document in the hyperlink in para above, the information memorandum submitted by ATL to the Bombay Stock Exchange before the company was listed in 2015

On 31 March 2021, Cresta held 2.98% of AEL, 3.93% of ATL and 1.34% of AGTL. It also holds a less-than-1% stake in AGEL.


LTS Investment Fund Limited

LTS Investment Fund Limited, registered in Mauritius in 2011, also shares the same address, management company, secretary, contact person, and contact number and email address as APMS, Albula and Cresta.

There is a complex chain that connects this entity to MIH International Ltd.

LTS is a subsidiary of Helvetic Capital Management Ltd (HCML). HCML’s parent company is Belvoir Investments AG. Belvoir Investments AG has three more subsidiaries: Monterosa Asset Management Ltd, Beverin Investments Ltd and BTS Investment Advisors Mauritius Ltd. Of these entities, Beverin Investments Ltd is ultimately consolidated or owned by MIH International Ltd through a chain of companies, with Belvoir Investment AG in the front end (see chart).

Structure and corporate links of Adani Group investor LTS

BTS Investment Advisors and Belvoir had operations in India through two entities, BTS Investment Advisors Pvt Ltd and Belvoir Advisors Private Limited. Both entities shared the same address of a corporate legal firm in Mumbai. According to Government of India records, BTS Investment Advisors Pvt Ltd has been struck-off the register of the Registrar of Companies in the Ministry of Corporate Affairs. Belvoir Advisors Private Limited is in the process of being struck-off the register. These two entities are key links in the chain of entities under MIH International (Monterosa Investments Holding), providing us clues to their connection to Indian corporate entities. More on these two entities a little later.

On 31 March 2021, LTS Investment Fund Ltd publicly held 20 stocks with a net worth of Rs 10,739.5 crore, of which 96.78% or Rs 10,394 crore (about US $1.4 billion) was held in four Adani Group companies, AEL, AGEL, ATL and ATGL.


Lotus Global Investment Fund

Lotus Global Investment Fund has been a major investor in the Adani Group for several years. Registered in Mauritius in 1999, the company shares the same address, management company, secretary, contact number and email address as APMS, Albula, Cresta and LTS – the only difference is that the contact person listed is not the same individual as in the case of the other four.

The 2010 Red Herring Prospectus Document (RHPD) of AEL shows that Lotus was holding 2.98% shares of AEL as of 31 December 2009. In December 2009, Lotus sold 2.8 million shares of APL to Albula in a block deal. Five months later, it sold 10.01 million shares of APL.

Lotus’s first major investment in the Adani Group was in the third quarter of 2005-06. It picked up 1.69% in AEL. By December 2008, Lotus was holding  4.51% equity shares in the company.

AEL’s RHPD of March 2010 states that Lotus was holding 2.98% of its shares. Lotus eventually diluted its stake in AEL in the first quarter of 2011-12 (according to quarterly data available at the Bombay Stock Exchange’s website). On 31 March 2021, Lotus held 10 stocks with a net worth of over Rs 73.2 crore. The entity did not hold any shares of any Adani Group company.

Lotus Global Investments Ltd is directly and ultimately consolidated by Connor Investment Holding SA. Lotus Global has five subsidiaries: Breezy Blue Investments Limited, Yew Holdings Limited, Indus Hotel Reality (Mauritius) Limited, Talisker Finance Limited, and Aberlour Finance Limited. The ultimate beneficiaries of Yew Holdings Limited and Indus Hotel Reality (Mauritius) Limited is MIH International Ltd.

Structure and corporate links of Adani Group investor Lotus

Adani Enterprises Ltd filing of 2010


Links to businesspersons accused of fraud – Fugitive Jatin Mehta and Monterosa Investments

Significantly, MIH International Ltd (Monterosa Investments Holdings) is an entity that has been probed by India’s investigative authorities in a different case relating to a company accused of fraud that was headed by an individual related by marriage to the Adani family.

First, let us take a step back to the two Indian entities, BTS Investment Advisors Private Limited and Belvoir Advisors Private Limited, that are part of the network of companies that connect LTS Investment Fund to Monterosa. Alastair Guggenbühl-Even, the Chief Executive Officer and Chairman of the Monterosa Group, had been a common director in both entities since their inception. (BTS was incorporated on 31 January 2002 and Belvoir on 27 March 2007.)

Guggenbühl-Even’s curriculum vitae on the website of the Monterosa Group website reads: ‘He has been a pioneer investor in the Indian sub-continent and following the market since the early 90s as well as servicing a growing investor community since the beginning of this century. Funds promoted and advised by Monterosa have become one of the most important independent investors in the Indian market, having expanded over the last years to all major global equity markets.

Guggenbühl-Even was a director in three more companies in India together with fugitive diamond merchant Jatin Rajnikant Mehta. These companies are Forever Precious Jewellery and Diamonds Limited (30 September 2006 to 9 December 2008), Revah Corporation Limited (23 January 2007 to 9 February 2008) and Carbon Accessories Limited (2 May 2007 till 9 December 2008). Jatin Mehta promoted Forever Diamonds which is currently under liquidation. Revah Corporation and Carbon Accessories have been struck off the list of entities maintained by the Indian Government’s Registrar of Companies.

Mehta has been accused of illegally siphoning off Rs 7000 crore (around US $940 million) from various Indian banks through standby letters of credit. Banks filed complaints against Mehta and his firms in March 2017. Well before then, in 2012, Mehta had left India and taken citizenship in St Kitts & Nevis, a tax haven in the Caribbean Sea. India doesn’t have an extradition treaty with that country. Jatin Mehta’s son Suraj is married to Krupa, who is Vinod Adani’s daughter and Gautam Adani’s niece.

Chaim Even-Zohar, a reputed Israeli investigative journalist who tracks the diamond industry, wrote a detailed article on Jatin Mehta’s businesses, his offshore companies and its connections with various other entities in different offshore jurisdictions and tax havens. In the article titled Smoking Gun: Winsome Case Evidence Buried in Lloyd’s Insurance Policy, Even-Zohar wrote: ‘Suraj Mehta’s father-in-law, Vinod Adani, uses (the) same address for their respective offshore companies as used by JRD International. But more than that, they share several directors. In one instance, we have found a shareholding link between Adani companies and JRD International.’

As mentioned, Suraj Mehta is Jatin Mehta’s son and JRD international Ltd, based in Dubai, is reportedly the holding company of many of the entities registered by the Mehta family in jurisdictions such as the British Virgin Islands, the Bahamas, Hong Kong and Singapore.

Reporting by Chaim Even-Zohar on Jatin Mehta's businesses

A screenshot from Diamond Intelligence Briefing (By Chaim Even-Zohar) Vol.32, 13 June 2016.


The Fugitive Sandesara Brothers and Monterosa Investments

Apart from Jatin Mehta, Monterosa has been linked to yet another set of businessmen who have been accused of fraud in India and who have also fled the country.

The Gujarat-based Sandesara Group was a diversified conglomerate with interests in various sectors, from pharmaceuticals to oil and gas. Its promoters have been accused of defrauding Indian banks to the tune of over Rs 8100 crore (about US $1.1 billion) by Indian law-enforcing authorities. The Group’s promoters – Nitin Sandesara, his brother Chetan Sandesara, wife Dipti Chetan Sandesara and Dipti’s brother Hitesh Patel – were all declared fugitive economic offenders by an Indian court in 2020. They have fled India and are currently suspected to be travelling between Nigeria, where the group own oil fields, and Albania.

A 2018 news report detailing the findings of the Enforcement Directorate’s investigation into the Sandesara Group found a complex network of offshore companies in tax havens that the agency alleged had been set up by the company to mask its transactions, to launder money and to evade taxes. One such company that featured in the ED’s findings was Monterosa Investments, the same entity that is the beneficial owner of five investors in the Adani Group.

Monterosa was found by the ED to be holding an investment in another entity named Riccioli Group SA, an entity in the British Virgin Islands ultimately owned and controlled by Nitin and Chetan Sandesara. The ED found that transactions of significant value to and from Riccioli by other entities in other tax havens were not disclosed to Indian authorities by the Sandesaras.

The report stated: ‘Also some of these accounts are held in the name of various funds and their sub accounts like investment in Riccioli is held with Monterosa in the name of Absolute Growth Fund. Albula Investment Fund Limited and Cresta Fund Limited are sub-accounts of the main account. The shareholding in group companies were further controlled by other obscure funds like Taib Securities Mauritius, Afrasia Bank Limited, Prime India Investment Fund, Elara India and Silver Stallion.’

The Offshore Leak Database, maintained by the International Consortium of Investigative Journalists based on documents that form a part of the Paradise Papers, reveals that ADG Absolute Diversified Growth Fund Limited (AADGFL) is an entity that had been incorporated in Bermuda on 19 July 2007. Even though AADGFL is registered in Bermuda, its ‘business address’ is Gotthardstrasse21, 8002 Zurich, Switzerland – the mailing address of Alastair Guggenbühl-Even, the CEO and Chairman of the Monterosa Group. He is the director of AADGFL and BTS Belvoir Investments AG is its shareholder. It may not be a coincidence that Albula and Cresta were also incorporated in 2007.

ICIJ Paradise Papers diagram showing links between AADGFL-related entities

Offshore Alert, a financial intelligence and investigations portal reported in June 2017 that AADGFL was one of the vehicles used by those behind the Geodesic scam to launder $125 million in allegedly fraudulent earnings.

Indian investigative agencies are presumably aware of the details of many of these funds and their connections with individuals accused of financial crimes. The question is why no action has been taken against them.

In the second article in this series, we examine the working of five other corporate entities in the list of Mauritius-registered Foreign Portfolio Investors and Foreign Institutional Investors that are invested in Adani Group companies.

The writer is an independent New Delhi-based journalist.