Pending CBI case proves shady Chinese links of Adani brothers: Report
The report says a criminal investigation against Adani Enterprises Limited and others registered in New Delhi by the CBI has been pending for three years.
Hyderabad: A pending investigation by the Central Bureau of Investigation (CBI) has revealed further connections of the Adani Group to Vyom Tradelinks, allegedly a shell company that again 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 and also to Gautam Adani’s elder brother Vinod Adani.
According to a report by independent journalists Ravi Nair and Paranjoy Guha Thakurta published on adaniwatch.org, a non-profit project established by the Australia-based Bob Brown Foundation to keep a watch on the activities of the Adani Group, the Adani Group’s Chinese connection, Vyom Tradelinks, was involved in the 2010 coal procurement scam related to the Andhra Pradesh Power Generation Corporation (APGENCO).
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The report says a criminal investigation against Adani Enterprises Limited and others registered in New Delhi by the 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 is related to allegations about rigging of tenders for procurement of coal for power stations owned by APGENCO that involve a ‘proxy’ company, Vyom Tradelinks, which has a record of changing hands through entities located both inside and outside India.
The firm, the report says, 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 report says.
According to the adaniwatch.org report, on June 26, 2010, APGENCO floated a tender to procure 600,000 metric tonnes of imported coal for three of its coal-power stations. Six companies, viz., 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.
It was a decade later, in January 2020, that the CBI filed an FIR against Adani Enterprises and three senior officials of the public-sector company National Cooperative Consumer Federation (NCCF) in the CBI court 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 Union Cabinet) 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.
In the FIR, the CBI has alleged that Adani Enterprises illegally participated in the tender process initiated by APGENCO and the National Cooperative Consumer Federation by engaging in cheating and criminal conspiracy. The investigation is ‘ongoing.’
‘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 report says, pointing out that 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, it says, adding that as was common with several entities in the Adani Group, the cross-connections were complex and convoluted.
“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,” it says.
It also cites show-cause notices issued by the DRI and the regulatory filings made by Adani Group companies, which 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.
On the allegations made by the CBI on rigging the tender related to coal procurement by the APGENCO, 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’,” the report says, adding that the CBI has not been able to conclude its investigations in the case.
Read the full story from Adani Watch here:
