Behind Adani deals, an 'elusive' elder brother

Gautam Adani is the public face of Adani Group, the sprawling Indian conglomerate that has been accused by an American short-seller firm of stock manipulation and accounting fraud.

- Shan Li

Behind the scenes, another family member has played a pivotal role in the company—and the activities that critics say misled investors: his elder brother, Vinod Adani.

For decades, according to allegations published by Hindenburg Research, the elder Mr. Adani was instrumental in managing overseas shell companies that Hindenburg says Adani Group used to manipulate the stock price of Adani companies, and artificially boost the financial health of its family-run firms in ways that were hidden from investors.

In one example, Hindenburg alleged that Vinod Adani used a Singaporean entity to remove impaired assets from the books of an Adani mining company in Australia so that the business wouldn’t have to reflect the losses on its balance sheet.

In another instance, which hasn’t been reported previously, a Singaporean entity that lists Vinod Adani as a director received large loans from a Dubai investment firm that he manages, and then lent funds to Adani firms in Australia. The loans occurred around the same time that Adani Group was planning to build a railroad in Australia, but ran into funding complications after an Australian state government vetoed a federal government plan to extend a loan for the project.

The Wall Street Journal wasn’t able to determine the source of the Dubai company’s funds. The rail line was eventually built in 2020 and 2021.

The Hindenburg report prompted a stock selloff that wiped out $105 billion in market value from the seven public companies that bear the Adani name. India’s Supreme Court recently formed an expert panel and asked the country’s market regulator to investigate the Hindenburg report’s allegations, including whether Adani Group failed to disclose transactions from groups related to the Adani family.