India Finance
Unravelling Adani’s network of offshore investors: Part 2
Jul 30, 2021
AdaniWatch examines the Adani Group's complex network of offshore investors

The alleged 'murky dealings' and 'wrong bets' of Adani Group investors based in Mauritius made headlines in late July 2021. An opposition MP has repeatedly and forcefully called for an inquiry into these shadowy offshore investor companies. In a two-part series, AdaniWatch examines the corporate characteristics of those funds. In the first story (yesterday), five entities based in Mauritius that are all linked to a single beneficial owner were examined. In this article, five more foreign investors disclosed by the Adani Group companies as stakeholders are investigated. The significance of these investor companies in the Adani Group is analysed. The findings raise questions about the identities of the beneficial owners of these entities, the extent of their links with fugitive Indian businessmen, and whether illegal transactions have occurred.

While the previous set of five companies examined all appeared to be part of a single interconnected network, the next five companies that are looked into are not so neatly tied together. However, the details reveal several threads for government investigators to unravel – if they wish to, that is.

The first of the five companies, Gudami International Pte Limited in Singapore, has been variously shown as a company in the Adani Group and also as an independent foreign institutional investor (FII) in different documents and disclosures. Agencies of the Indian government can probe the precise character of this entity.

The next two companies on the list, Elara India Opportunities Fund and Vespera Fund Limited, are linked to each other and connect to a UK-based investment bank owned by Indian nationals whose names appeared in a report of the International Consortium of Investigative Journalists(ICIJ) that was part of the so-called Paradise Papers. A British Member of Parliament is a non-executive, independent professional director of the investment bank. He is a person of Indian origin who is well known in India.

The next company, the Cyprus-based New Leaina Investments Limited, provides a link to a fugitive Indian businessman over and above the two we encountered in the first article in this series.

And the fifth and final company, Asia Investments, is an oddity. It is apparently connected to no other entity anywhere in the world, which is quite unlike similar entities based in tax havens.

(Story continues below)

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Gudami International Pte Limited, Singapore

Gudami is one of the oldest investors in the Adani Group, dating from at least as far back as 2004-05. It held its investments in Adani Enterprises Limited (earlier Adani Exports Limited) until the quarter that ended on 30 June 2015. On 9 March 2020, the Singapore government struck off Gudami International PTE Ltd for non-compliance of regulations. This occurred after repeated warnings. Still the question remains as to whether Gudami is an independent investor.

The Red Herring Prospectus Document of Mundra Port And Special Economic Zone Limited (MPSEZ, the earlier avatar of Adani Ports and Special Economic Zone or APSEZ) mentions that Gudami International PTE Limited was holding 1.23% of the company’s shares in October 2005. The same document says that in October 2007, Gudami was still holding 1.23% of the company’s shares. Another entity, Gudami International Mauritius Limited, was holding a 6.54% stake in MPSEZ. The document also mentions that the two Gudami companies transferred their shares to Ventura Trade and Investment Private Limited on 18 October 2007. Ventura was named as a promoter group company of MPSEZ based out of Mauritius.

In the second quarter of 2010-11, Gudami picked up 1.27% in Adani Enterprises Limited (AEL) which it offloaded only in FY 2016-17. Just before Adani Transmission Limited (ATL) was listed, Gudami IPL was holding 1.18% of share capital in the company.

Since 2005, Gudami was never shown as part of the Adani Group in any filing by an Adani Group company. However, the entity kept investing substantial sums of money in Adani Group companies to buy equity as FDI (Foreign Direct Investment) under the ‘automatic’ route that does not require government approval. In every disclosure of such an investment, companies in the Adani Group mentioned Gudami as a Foreign Institutional Investor (FII) – that is, an unrelated foreign investor.

However, an adjudication order issued in a case relating to alleged evasion of customs duty (Office of the Commissioner Of Customs, Chhatrapati Shivaji International Airport, Mumbai, Order Number COMMR/PMS/ ADJN/13/2012-13) by Adani Exports Ltd, now Adani Enterprises Limited (AEL) and five other companies for purported misdeclaration of the Freight on Board (FoB) value of cut and polished diamonds exported by the company during 2004-05 and 2005-06, made a few interesting observations about Gudami International.

1. Chang Chung Ling, director of Gudami International Pte Limited (GIPL), and Vinod Shantilal Adani shared the same residence address. GIPL and Adani Global Pte Ltd (AGPL) are registered in that residential address. Adani Global Pte’s registered office address was also the residential address of Chang Chung Ling, director of Gudami. Chang Chung Ling and Vinod Shantilal Shah (an alias for Vinod Adani), another Gudami director, also shared an address. See Figures 1 and 2.

2. Joseph Selvamalar is a common director in GIPL, AGPL and Adani Global Limited (Mauritius). See Figure 3.

3. Mary Joseph, an employee of the AGPL, was a director of GIPL. See Figure 3.

4. As per AEL’s balance sheet for 2000-01, 2004-05 and 2005-06, Chang Chung Ling, director of GIPL, was a shareholder and director of Adani Global Limited (Mauritius) and AGPL (Singapore). AGL(M) is a 100% subsidiary of Adani Enterprises Limited. AGPL and Adani Global FZE (UAE) were 100% subsidiaries of AGL(M). See Figure 3.

5. Around the same time, Vinod Adani was a director of AGL(M) (along with Chang Chung Ling). See Figure 4.

Figure 1. Source: page 24 of the adjudication order

Figure 2. Source: Page 26 of the adjudication order

Figure 3. Page 27 of the adjudication order

Figure 4. Page 28 of the adjudication order

Figure 5. Page 31 of the Adjudication Order

The customs department alleged that even the bank account of GIPL was opened by AEL (see Figure 5).

In October 2008, Chang Chung Ling used the FDI route to transfer Rs 2.23 crore (approx. US $300,000) to acquire equity shares of Mundra Ports and SEZ. In August 2010, Gudami used the FDI route to transfer US $18.63 million to Vyom Tradelink Pvt Limited. AEL’s annual report for 2009-10 states that Vyom is an Adani Group company.

The Directorate of Revenue Intelligence (DRI), India’s customs investigation authority, has claimed in a show-cause notice issued to an Adani Group that alleged over-invoicing and money laundering, that the alleged illicit gains obtained through over-invoicing were diverted to ElectroGen Infra Holding Pvt. Ltd (EIHPL), an entity owned by the Adani Group in Mauritius. Interestingly, Chang Chung-Ling was a director in EIHPL and Vinod Adani became the sole director/owner of the company on 12 January 2010.

Figure 6. Source: Page 22 of DRI show cause notice

Gudami’s name appeared in an investigation by the Enforcement Directorate (ED) into alleged bribery in the cancelled deal to purchase AgustaWestland helicopters for VVIPs (very, very important persons). A report in the Economic Times in July 2018 stated: ‘Gudami International Pte is among the three Singapore-based companies that investigators suspect received over Euros 2 million, which was allegedly laundered by raising bogus invoices…’.

In March 2020, the Singapore authorities struck-off the mysterious Gudami International Pte Limited from its register of companies.


Elara India Opportunities Fund

Elara India Opportunities Fund Limited (EIOF), an entity registered in Mauritius, is directly consolidated by Elara Capital Plc, a British investment bank. Elara’s first success came in 2003 when it raised US $15 million through Global Depository Receipts (GDRs) for Sterling Biotech promoted by the Sandesara brothers who have been declared fugitives by an Indian court.

EIOF picked up 1.3% in AEL back in 2012-13. On 31 March 2021, it held 4.42% of the equity shares in the company. In Adani Power Limited (APL), EIOF has held an average of 2.96% of its shares since March 2016. In Adani Transmission Limited (ATL), Adani Total Gas Limited (ATGL) and Adani Green Energy Limited (AGEL), EIOF held shares even before the companies were listed.

On 31 March 2021 this year, EIOF publicly held 32 stocks with a net worth of over Rs 25,541.3 crore, of which Rs 24,954.5 crore (a staggering US $3.3 billion, or 97.7%) were held in five listed Adani Group companies in the following manner: 29.7% of the total investment was in AEL, 26% in ATL, 21.77% in ATGL, 15.96% in AGEL and 4.27% in APL.

It is worth noting that the Securities and Exchange Board of India (SEBI) imposed a penalty of Rs one million (about US $13,000) on Elara India Opportunities Fund in 2015 for ‘failing to make the requisite disclosures regarding the change in its shareholding consequent upon the transactions’ that it carried out in 2009-10.

The FDI Database of the Department of Industrial Policy and Promotion of the Government of India for the month of June 2009 shows that Somerset Emerging Opportunities Fund (SEOF) invested US $4.19 million in Adani Power Maharashtra Limited. SEOF (the fund became defunct in July 2015) disclosed its list of shareholders to the Mauritius government authorities. One of its shareholders was Trinity Emerging Markets Opportunities Fund Limited (TEMOFL). See Figure 7.

Figure 7. TEMOFL is a shareholder of SEOF

According to the Corporate and Business Registration Department of the Mauritius Government, Rajendra Bhatt and Ajaykumar Amarnath Pandey are directors of EIOF.  Disclosures made by the ICIJ (International Consortium of Investigative Journalists) in its ‘Paradise Papers’ investigation linked Bhatt and Pandey to the Bermuda-registered TEMOFL. The entity was linked to 18 different individuals and entities. Bhatt was a shareholder, director and the president of TEMOF, while Pandey was a director and its vice president.

Figure 8. Paradise Papers diagram of entities connected to Trinity Emerging Markets Opportunities Fund Limited (TEMOFL)


An interesting link that emerges here is to Lord Meghnad Desai, a former member of the British Labour Party, and a member of Britain’s House of Lords. Desai is an additional director of Elara Capital plc, the parent company of EIOF. Desai was born in Vadodara, Gujarat, the home state of India’s Prime Minister Narendra Modi and Gautam Adani. The 81-year-old Desai stood unsuccessfully for the position of Lord Speaker in the House of Lords in 2011. He is a recipient of the third highest civilian award given by the Indian government, the Padma Bhushan, and is professor emeritus in the London School of Economics.


Vespera Fund Limited

Vespera Fund Ltd, registered in Mauritius, is a subsidiary of Elara Asset Management Limited, which is owned by Elara Capital. Hence, Vespera Fund Limited and Elara Opportunities Fund Limited are interrelated and have the same ultimate beneficiaries.

Figure 9. Inter-relationship of Vespera and Elara

On 31 March 2021, Vespera publicly held nine stocks with a net worth of Rs 9,786.4 crore, of which Rs 9,654.7 crore (about US $1.3 billion or 98.65%) was held in Adani Group firms, AEL, AGEL, ATGL and ATL.


New Leaina Investments Limited

New Leaina Investments Limited (NLIL), based in Cyprus, presents a connection to another fugitive Indian businessman, luxury diamond trader Nirav Modi (no relation to the Prime Minister), who has been accused of defrauding Indian banks and is currently lodged in a prison in the UK.

The website of NLIL states:

‘One of its main purposes [in setting up the company] is to participate into the Indian Capital Market, i.e. to go long into securities listed on the Indian stock exchanges (e.g. shares, debt and other securities listed with BSE and NSE). For this purpose, the company is registered as an FPI ("Foreign Portfolio Investor") with a highly reputed designated depository participant ("DDP") in India on behalf of the Securities and Exchange Board of India ("SEBI").

‘An important investment objective is to provide superior absolute returns by investing primarily under the FPI regulations, as defined (by) SEBI (sic), into securities of Indian companies listed on recognized Indian Stock Exchanges.

‘The minimum initial subscription amount per investor is USD 5 million, unless the Board (in its absolute discretion) deems it advisable to permit initial investments of a lesser amount, which under no circumstances shall be less than USD 1 million. Existing shareholders may make additional investments in amounts no less than USD 500,000.’

On 31 March 2021, New Leaina publicly held five stocks with a net worth of Rs 2,059.4 crore, of which Rs 2,013 crore (about US $270 million, or 97.75%) has been invested in AGEL.

According to the Cyprus Department of Companies and Official Recipient, Ministry of Commerce, NLIL has two directors, Marios Tofaros and Michalis Assiotis. The first is a director of Amicorp (Cyprus) Limited and according to his profile on LinkedIn, he is a non-executive director of NLIL, which is a part of the Andetta Group.

The Andetta Group has three offices:Andetta Private Equity NV registered in Curaçao, Andetta Private Equity Services (Switzerland) LLC and Andetta Group Services (Mauritius) Limited. According to its three-page website website:

‘Andetta offers operational fund investment services to institutional and professional investors such as banks, family offices and high net-worth individuals from key financial centres… Our private ownership further allows us to be fully committed to our client`s long-term financial needs and goals.

‘Andetta Private Equity N.V. is a privately held Alternative Investment Group with main interests in the Emerging Markets of Asia, Africa, Eastern Europe and Latin America.’

The website, seemingly last updated in 2015, goes on to say:

‘We believe the newly-elected leaders in India and Indonesia will continue to focus on reforms, as both Prime Minister of India and President of Indonesia were elected on reform tickets… And the Indian ruling party's reform manifesto is impressively long – including urbanization, investment liberalization and administrative reforms – while the technocratic government in Indonesia has already shown that it is willing, and capable of reforms, by cutting back on expensive fuel subsidies.’

Amicorp (Mauritius) Limited is the management company and secretary for many of the Adani Group’s companies that are registered in Mauritius, that is, entities the Adani Group officially declares as belonging to its ‘promoter group.’ The director of Amicorp (Cyprus) Ltd is the director of New Leaina Investment Limited. NLIL and Amicorp Cyprushave the same address and phone number. Amicorp manages New Leaina.

Now the link with Nirav Modi. The Cyprus-based Jade Bridge Holdings Ltd invested US $20.26 million in Nirav Modi’s Firestar International Private Limited between April 2014 and September 2016. Jade Bridge Holding’s registered address is 15 Dimitriou Karatasou, Anastasio Building-G, Flat No: 601, Floor No: 6 - 2024 Nicosia, Cyprus. This is the same address of AmiCorp Cyprus Limited. According to the Cyprus Securities and Exchange Commission, Amicorp Cyprus has three subsidiaries: Briantserve Limited, Menustrust Limited and Globiance (Nominees) Limited. These subsidiaries manage New Leaina Investment Fund Ltd and Jade Bridge Holding Limited.


Asia Investment Corporation (Mauritius) Limited

The last of the five companies examined in this article, Asia Investment Corporation (Mauritius) Limited, shares its registered office address, management company, secretary, contact person, phone number and email address with Cresta, Albula, APMS and LTS (companies that were described in the first article). This entity, however, does not appear to have any link with any other entity anywhere, according to its LEI data. This is rather unusual.

On 31 March 2021, Asia Investment Corporation publicly held six stocks with a net worth of Rs 6,743.6 crore, of which 99.1% or Rs 6,682.7 crore (almost US $900 million) was held in three Adani Group companies, AGEL, ATL and APL.


The Bigger Picture

The examination of nine entities registered in Mauritius, Singapore and Cyprus that are currently heavily invested in the Adani Group’s listed companies, together with another entity that used to be active, reveals that their investment transactions are far from transparent, although these are presented as institutional investments by legitimate funds.

Nitin Chanduka and Gaurav Patankar of Bloomberg Intelligence, after analysing the technical indicators of the Adani Group of companies, wrote on 10 June 2021: ‘Among the biggest foreign investors are a few Mauritius-based funds holding over 95% of assets in these companies. Such concentrated positions, along with negligible onshore ownership, create asymmetric risk-reward as large investors conspicuously avoid Adani.’

What place do these funds occupy in Adani Group companies? The following charts are self-explanatory.

Figure 10. AGEL shareholding pattern, 30 June 2021

Figure 11. APL shareholding pattern, 30 June 2021.

Figure 12. ATGL shareholding pattern, 30 June 2021.

Figure 13. AEL shareholding pattern, 30 June 2021.

Figure 14. Adani Ports and Special Economic Zone shareholding pattern, 30 June 2021

[FII - Foreign Institutional Investor; DII - Domestic Institutional Investor; Total – Total Energies SA, a French multinational oil and gas conglomerate that has picked up a stake in Adani Green Energy and is a joint venture partner for Adani Total Gas Limited, OCB – Overseas Corporate Bodies]

Note that, apart from APSEZ, in all the other cases the FII investment makes up the bulk of the non-promoter holding, that is, the free-float on the market.

Another significant point to note is the low investment in five of the six (barring APSEZ) Adani Group companies by Domestic Institutional Investors. These DII’s primarily consist of Mutual Funds and Insurance companies which invest retail clients’ money. Life Insurance Corporation of India, a government entity, holds the major part of the DII investment in these companies.

An analysis by an Indian analyst Danish Khanna notes that “Most often, large caps are run by quality management teams which have a great trust from mutual funds when they park their investors' funds. Mutual fund managers have to be very vigilant while making investment decisions as it isn't their own money which they are investing. Rather it belongs to small investors. And so, they do it with utmost responsibility, trust and transparency.” To their surprise, the report notes, five of the top ten Indian companies with least investment by mutual funds are Adani group companies - namely, Adani Power, Adani Total Gas, Adani Green Energy, Adani Transmission and Adani Enterprises.

Having gone through the details with a fine toothed comb, the big question that emerges is, who are the beneficial owners of these investor companies and are the companies bonafide FPIs? Are any of these entities involved in or linked to illegal transactions, as has been alleged by the Directorate of Revenue Intelligence in the case of Gudami, and as has been alleged by the Enforcement Directorate of Monterosa, the ultimate parent of Albula, Cresta, APMS, LTS and Lotus, in the cases of the fugitive Sandesaras, Jatin Mehta, and of Amicorp, the company that manages Leaina in the case of Nirav Modi?. These are the questions that this investigation based only on publicly available information raises. Some of these questions are now beginning to be raised by Indian opposition politicians.