criminal investigation against Adani Enterprises Limited and others registered in India’s capital New Delhi by the Central Bureau of Investigation (CBI) has been pending for three years. The filing of a first information report (FIR) by the CBI in the designated CBI court in New Delhi relates to allegations about rigging of tenders for procurement of coal for power stations owned by the Andhra Pradesh Power Generation Corporation that involve a 'proxy' company named Vyom Tradelinks, which has a record of changing hands through entities located both inside and outside India. The firm is linked to Chinese national Chang Chung-Ling, who has been named in the Hindenburg Research report as a director of several Adani Group companies. Vyom Tradelinks is also linked to entities associated with Gautam Adani's older brother, Vinod Adani, whose involvement with a network of offshore shell companies based in tax havens has become an issue of great notoriety in recent international reporting on the Adani Group.
The story begins on 26 June 2010, when the Andhra Pradesh Power Generation Corporation (APGENCO), a company owned by the state government of Andhra Pradesh in southern India, floated a tender to procure 600,000 metric tonnes of imported coal for three of its coal-power stations. Six companies—Maheshwari Brothers Coal Limited, Swarana Projects Private Limited, Gupta Coal India Limited, Kyori Oremen Limited, Adani Enterprises Limited ('Adani Enterprises') and Vyom Tradelinks Private Limited (VTPL)—participated in the bidding. Adani Enterprises won the bid.
Almost a decade later, on 15 January 2020, the Central Bureau of Investigation (CBI), the premier police investigative agency in India filed a first information report (FIR) against Adani Enterprises and three senior officials of the public-sector company National Cooperative Consumer Federation (NCCF). The FIR was filed in the designated court of the CBI in New Delhi. Those named were accused of criminal conspiracy to manipulate the tender proceedings to ensure Adani Enterprises won the bid.
The CBI comes under the Department of Personnel in the Ministry of Personnel, Pension and Public Grievances, that is headed by a Minister of State (or junior minister in the Council of Ministers in the Union Government of India) who, in turn, works under the Prime Minister of India – thus, in effect, the operations of the CBI come directly under the administrative control of the Prime Minister’s Office. Its workings are explained at the end of this story.
The FIR relating to the alleged conspiracy to rig the coal import tender floated by APGENCO was lodged in India’s capital New Delhi where the CBI is based.
Details about how three senior officials of the NCCF were accused by the CBI of manipulating tender proceedings in 2010 to ensure Adani Enterprises won the contract to supply imported coal to APGENCO have been widely reported in the media. The Adani Group has denied any wrongdoing.
The FIR is also mentioned in the fine-print of the Draft Red Herring Prospectus (DHRP) filed by Adani Wilmar Limited on 3 August 2021 with the Securities and Exchange Board of India (SEBI), the regulator of the country's financial markets, in the run-up to the listing of the company’s shares in stock exchanges. (Adani Wilmar Limited is a joint venture between the Adani Group and Wilmar International Limited, one of south-east Asia's leading agri-business groups).
Page 301 of the DHRP, under the title ‘criminal litigation against promoters,’ reads: '(The) Central Bureau of Investigation (CBI) has [filed] an FIR against Adani Enterprises and NCCF on 15 January 2020, in relation to the tender process for supply of imported coal. In terms of the FIR, CBI has alleged that Adani Enterprises has illegally participated in the tender process initiated by Andhra Pradesh Power Generation Corporation Limited and the National Cooperative Consumer Federation by engaging in cheating and criminal conspiracy. The investigation is ongoing.'
What Adani Wilmar's DHRP did not mention were the specific charges against Adani Group's flagship company, Adani Enterprises. The CBI had alleged in its FIR (illustrated above): ‘It is prima facie apparent the M/s Adani Enterprises Ltd presented M/s Vyom Trade Links Private Ltd as a proxy company in this particular tender, and M/s Vyom Trade Links Pvt Ltd withdrew its offer on very flimsy grounds.’
The CBI investigation alleged close links between Adani Enterprises and Vyom Trade Links Pvt Ltd (VTPL). The analysis below bears this out. Indeed, in 2006-07, Adani Enterprises identified VTPL as a subsidiary. While this status subsequently altered, the links to the Adani Group via Chang Chung-Ling (also known as Lingo-Chang) and Vinod Adani remained.
The curious case of Vyom Tradelinks Private Limited
As is common with several entities in the Adani Group, the cross-connections are complex and convoluted. Bear with us as we run through them.
Records show that VTPL was incorporated in Ahmedabad, Gujarat, where Adani Group is headquartered, on 24 March 2005, with an authorised share capital of ₹100,000 (about US $1200). A September 2006 filing by VTPL with the Registrar of Companies mentioned three individuals – Juvenil Jani, Pradeep Mittal and Bhavik Shah – as the company's directors. During this period, Mittal was a director of Adani Enterprises and Adani Power Pvt Ltd, while Shah was a director of Adani Estates Pvt Ltd, Adani Infrastructure Services Ltd and Aaloka Real Estate Pvt Ltd, an Adani Group company.
On 27 March 2007, VTPL increased its authorised share capital fivefold to ₹500,000. Two days later, on 29 March, the company allotted 40,000 shares with a nominal share value of ₹10 to Adani Enterprises. This made Adani Enterprises an 80% shareholder of VTPL.
The 2006-07 annual report of Adani Enterprises described VTPL as a 100% subsidiary. VTPL did not report business operations during the period; the company neither earned nor lost any money.
The 2008-09 annual report of Adani Enterprises, however, reported that VTPL was no longer a subsidiary of the company.
How did this happen?
VTPL's filings with the Indian government's Ministry of Corporate Affairs showed that Adani Enterprises had transferred its equity shares in VTPL to two individuals: Dipak Ambalal Shah and Yogesh Ramanlal Shah.
The de facto Adani Enterprises link lay elsewhere. The Directorate of Revenue Intelligence (DRI), the intelligence wing of the Customs department in India's Ministry of Finance, in two different show-cause notices issued to Adani Enterprises on misuse of export benefits while trading in cut and polished diamonds and gold jewellery, made certain allegations. The notices served on 30 March 2007 and 11 September 2009 noted that Dipak Shah (spelt Deepak Shah in the DRI notices) was associated with Adani Enterprises (formerly Adani Exports Ltd). Among others mentioned in the notices was Samir Vora, Gautam Adani's brother-in-law.
Even the other person who owned shares in VTPL—Yogesh Shah—had a link with the Adani Group at that time. He was a director of Shankheshwar Infracon Private Limited, a group company. A few months later, he became a director of Kutchh Power Generation Limited, a subsidiary of Adani Enterprises.
From 2015 onwards, Yogesh Shah was on the board of several companies of the Adani Group, such as Adani Renewable Energy Holding Five Limited, Prayatna Developers Private Limited, Adani Wind Energy (Gujarat) Private Limited, Parampujya Solar Energy Private Limited, Adani Transmission (India) Limited, Golden Valley Agrotech Private Limited, Adani Power Dahej Limited and Satya Sai Agroils Private Limited.
He was also a director of Rehvar Infrastructure Private Limited, which held₹15 billion (approximately US $182 million) worth of compulsorily convertible debentures (CCDs) of Adani Infra (India) Ltd on 31 March2021.
Frantic activity in VTPL during the tender process
Before the tenders were submitted to the government-owned NCCF on 10 July2010, a lot transpired behind the scenes.
The CBI FIR alleged that Adani Enterprises gave an unsecured loan of ₹168.8 million (approximately US $2 million) to VTPL, and the State Bank of India issued bank guarantees to both Adani Enterprises and VTPL at the same time for participating in the tender. In fact, Adani Enterprises' annual report for 2008-09 confirms the CBI's allegation that the company gave an unsecured loan to VTPL. The following year's annual report of the company showed that VTPL had cleared the dues, and nothing remained outstanding.
While all these transactions were in the open, there was a flurry of activities behind closed doors. On2 July2010, eight days before VTPL participated in the coal tender, Dipak Shah and Yogesh Shah resigned from the board of directors of VTPL. Raj B Shah and Sukoon V Shah became additional directors of the company on the same day. Three weeks later—on 24 July—VTPL allotted 4.45 million of its shares to Gudami International (Mauritius) Ltd. In August, this Mauritius-based company invested ₹867.75 million in VTPL using the FDI (foreign direct investment) route.
On 3 November2010, ICICI Bank issued a 'credit arrangement letter' to VTPL, sanctioning it a credit limit of₹1.5 billion (approximately US $18 million). The approved working-capital facility had interchangeability between a Bank Guarantee and a Letter of Credit to the extent of ₹1 billion (approximately US $12 million). The purpose of the facility was 'procurement of coal'.
However, the convention in India (and across the world) is that no bank extends such credit facilities without taking adequate security. Documentation shows that VTPL hypothecated the first right of its entire stock of raw materials, movable assets, book debts, outstanding monies and present and future receivables to ICICI Bank. VTPL also provided ICICI Bank with a corporate guarantee from Gudami International Pte Ltd and a non-disposal undertaking of Adani Enterprises shares worth ₹3 billion (about US $36 million). Gudami International Pte Ltd held ₹17 billion (about US $206 million) worth of Adani Enterprises shares at that time.
Gudami: invisible player in VTPL complexities
There is a story to be told about Gudami International Pte Ltd. Incorporated in Singapore, the entity's 2005 annual report states that Chinese national Chang Chung-Ling held all but one of Gudami's two million shares. A single share was held by Joseph Selvamalar.
Adani Watch reported on 2 March 2023 that the name of Chang Chung-Ling, also known as (aka) Lingo-Chang, had appeared in the now infamous Hindenburg report on Adani. He has been a director in several Adani Group companies. One of his two sons, Chien-Ting Chang (Morris Chang),is reportedly the representative of the Adani Group in Taiwan. He and his brother Chien-Huan Chang (Norris Chang) were associated with a shipping firm linked with Adani Shipping (China) Co Ltd that was sanctioned by the United Nations Security Council for trading with North Korea.
Long before the Hindenburg Research report was published, the name of Chang Chung-Ling had been cropping up time and again in connection with the Adani Group's affairs. The March 2007 DRI show-cause notice to Adani Enterprises on misuse of export benefits said that he was a director of Gudami International Pte Ltd and was also a shareholder director of Adani Global Ltd in Mauritius.
Vinod Adani, the elder brother of Gautam Adani, and Chang Chung-Ling were directors of Adani Global Pte Ltd, a subsidiary of Adani Global Ltd, registered in Singapore. Both these companies are wholly owned subsidiaries of Adani Enterprises. The DRI notice revealed that, as per the company registration documents in Singapore, Adani Global Pte Ltd and Gudami International Pte Ltd were operating from the same address. Vinod Adani and Chang Chung-Ling had the same residential address as well.
The DRI listed many such links between these companies. The DRI also specified that there were financial transactions worth billions of dollars between these companies and Adani Enterprises. The DRI concluded that 'Gudami International is directly/indirectly owned and controlled by Adani Enterprises only'.
It was against this backdrop that, in August 2010, Gudami International (Mauritius) Ltd invested ₹867.75 million (approximately US $10.5 million) in VTPL through the Foreign Direct Investment route.
On 20 March 2011, VTPL issued another 500,000 shares to Gudami International (Mauritius) Ltd, raising the latter's holding in VTPL to 100%.
Sudden growth and disappearance of VTPL
Once VTPL ceased to be an explicitly named subsidiary of Adani Enterprises, its income suddenly started growing. The 2009-10 annual report of the company stated that it had a total revenue of ₹904,761,237 (approximately US $11 million) in the financial year 2008-09. By the end of the following financial year (2009-10), the figure had jumped by a staggering 1328%, reaching ₹12,920,688,289 (US $157 million).
The 2009-10 annual report of VTPL stated: ‘The foreign exchange outgo during the year under review amounted to ₹10,06,65,54,310/- towards CIF (or cost, insurance and freight) value of imports of traded goods.'
The following chart explains VTPL's foreign exchange (FE) outgo (in ₹) during the next few years.
The 2012 annual report of VTPL showed that during the financial year, the holding company Gudami International Mauritius Ltd changed its name to PMC Infra Ltd.
During the financial year 2018-19, PMC Infra Ltd transferred its stake in VTPL to Milestone Tradelinks Pvt Ltd (MTPL), and VTPL became a subsidiary of MTPL. The following year, MTPL amalgamated VTPL.
MTPL's name was mentioned in the Hindenburg Research report as an entity holding compulsory convertible debentures (or CCDs)worth ₹7.5 billion(approximately US $92 million) in Adani Infra (India) Ltd, as per Adani Infra's regulatory filings. However, the standalone financial statement of MTPL for 2020-21 showed that it held 75 million CCDs of Adani Infra (India) worth ₹4.84 billion (approximately US $59 million).
This was not the first time MPTL was reported to have consolidated/amalgamated entities related to the Adani Group against which allegations had been levelled by a government of India body like the DRI. Here's a short history.
In May 2012, seven companies had amalgamated with Milestone Tradelinks Pvt Ltd: these were Aditya Corpex Pvt Ltd, Hinduja Exports Pvt Ltd, Midex Overseas Ltd, Ambitious Tradelinks Pvt Ltd, Anand Trade-Movers (Gujarat) Pvt Ltd, NABH Tradelink Pvt Ltd and Surya-Rath Tradelinks Pvt Ltd. The first three on the list had been accused by the DRI of forming a consortium 'under the direct management and control of M/s Adani Exports Ltd' in its show-cause notices.
Return of the China connection
Over time, Gudami International Pte Ltd, Gudami International (Mauritius) Ltd, and Project Monitoring and Construction Limited have held substantial stakes in various Adani Group companies. Both the show-cause notices issued by the DRI and the regulatory filings made by Adani Group companies establish that Chang Chung-Ling was closely associated with the group and that Vinod Adani and Chung-Ling had been directors in each other's companies.
The November 2007 DHRP of Mundra Port and Special Economic Zone Limited (or MPSEZ, now called Adani Port and Special Economic Zone Limited or APSEZ) had clearly mentioned that Gudami International Pte Ltd, Gudami International (Mauritius) Ltd, and Project Monitoring and Construction Limited together held slightly over 16% of MPSEZ and later transferred their stakes to the Adani Group's Mauritius entities—Ventura Trade and Investment Private Limited, Pride Trade and Investment Private Ltd, and Trident Trade and Investment Private Ltd.
The July 2009 DHRP of Adani Power Ltd showed that Chang Chung-Ling held the shares in the company in his individual capacity. It also showed that Vinod Adani (aka Vinod Shantilal Shah), Samir Vora, Giandeo Reemul and Theyvarajen Ponumbalum were the directors of Adani Global Ltd, a 100% subsidiary of Adani Enterprises, that was registered in Mauritius.
Stock exchange filings of Adani Enterprises indicate that Gudami International Pte Ltd held a stake in the company until June 2015.
The 2014 DRI show-cause notice to Adani Enterprises already indicated that Chang Chung-Ling, Giandeo Reemul, and Theyvarajen Ponumbalum were the directors of Gudami International (Mauritius) Ltd alias PMC Infra Limited, the holding company of PMC Projects (India) Pvt Ltd.
We reported in 2021 that Gudami International Pte Ltd's name also appeared in the list of companies allegedly used for money laundering in the scandal related to the purchase of helicopters for VVIPs (very, very important persons) – also referred to as Choppergate or the AgustaWestland scam. When Gudami's name appeared on the list of companies that were allegedly involved in money laundering for arms brokers, the name of the company was struck off from Singapore's company registry in March 2020.
The bottom line
Returning to the allegations made by the CBI on rigging the tender related to coal procurement by the Andhra Pradesh Power Generation, a major entity in the controversy was VTPL, a company that had its roots in the Adani Group before the tender process and then gradually disappeared into the group's maze of companies.
Every link in the chain is well-documented. The information we have provided in this article is all available in the public domain—from the Mauritius-based holding company which owned VTPL to Chang Chung-Ling, the person who was behind both the companies, and to Vinod Adani, a figure now conceded by the Adani Group to be a promoter of 'various listed entities in the Adani Group'.
Yet the CBI, often described as India's premier police investigation agency, has not been able to conclude its investigations in the case.
On 20 March 2023, we emailed questionnaires to the corporate communications head of the Adani Group and the information officer of the CBI, to confirm the factual accuracy of the information we have compiled. This article will be updated as and when a response is received from either or both of them.
The authors are independent journalists.
An explanatory note:
The CBI can register (or file or lodge – terms used interchangeably in India) an FIR on its own initiative (as in this instance) or based on a complaint by someone else. The first step in the process is what is described as a ‘preliminary’ inquiry, which is followed by the registration of an FIR. After the CBI gathers what it considers ‘sufficient’ or ‘adequate’ evidence, it moves a designated court of law. The process that has to be followed is explained in these illustrative instances.