Who Owns ACC And Ambuja Cements? Not Gautam Adani, Claims Report

Adani Group reportedly used a special purpose vehicle (SPV) called Endeavour Trade and Investment Ltd to buy Switzerland-based Holcim Group's 63.1 per cent stake in Ambuja Cements and 54.5 per cent holding in ACC Limited.

New Delhi: In September 2022, it was widely reported that the Adani Group has acquired majority stake in Ambuja Cements and ACC to become India’s second-largest cement company.

“The Adani Family, through Endeavour Trade and Investment Ltd, a special purpose vehicle, has successfully completed the acquisition of Ambuja Cements Ltd and ACC Ltd,” the Adani Group said in a statement in September. “The transaction involved the acquisition of Holcim’s stake in Ambuja and ACC along with an open offer in both entities as per SEBI [Securities and Exchange Board of India] regulations.”

However, a new report published in the Morning Context has claimed that Adani Group does not own Ambuja Cements and ACC, adding that the cement companies are owned by entities that are controlled by Vinod Adani, the elder brother of Gautam Adani.

THE CLAIM

Adani Group reportedly used a special purpose vehicle (SPV) called Endeavour Trade and Investment Ltd to buy Switzerland-based Holcim Group’s 63.1 per cent stake in Ambuja Cements and 54.5 per cent holding in ACC Limited.

As per the report in the Morning Context, the Mauritius-based SPV is owned by Vinod Adani. It cited the final offer letter issued by Ambuja Cements.

“This means neither Adani Enterprises nor any of the Adani group’s other listed companies in India or their subsidiaries acquired Ambuja Cements/ACC. Even though group chairman Gautam Adani projected to the world at large and shareholders that it is the Adani group of companies which acquired the cement companies,” the report said.

WHY IS THIS CLAIM SIGNIFICANT

While responding to Hindenburg Research’s questions on Vinod Adani’s role in Adani Group, the conglomerate had responded by saying, “Vinod Adani does not hold any managerial position in any Adani listed entities or their subsidiaries and has no role in their day to day affairs. As such, these questions have no relevance to the entities in the Adani portfolio and we are not in a position to comment on your allegations on the business dealings and transactions of Mr. Vinod Adani. We reiterate that any transactions by the Adani portfolio companies with any related party have been duly identified and disclosed as related party transactions in compliance with Indian laws and standard and have been carried out on arm’s length terms.”

ADANI GROUP’S RESPONSE

Adani Group has said that the special purpose vehicle, “Endeavour Trade and Investment, controlled by Vinod Adani, the Acquirer of ACC and Ambuja Cements, belongs to Adani Group”, in response to query by CNBC-TV18.

This contradicts the conglomerate’s earlier response which seemed to dismiss the speculations of relationship between Adani Group’s listed companies and Vinod Adani. Hindenburg Research had accused the conglomerate of improper use of offshore tax havens.

Hindenburg mentioned Vinod Adani at least 151 times in the 24 January 2023 report, alleging that the entities controlled by him were used as a “conduit for money laundering and share-price manipulation.” As per Hindenburg Research, Vinod Adani “manages a vast labyrinth of offshore shell entities” that have “collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals.”

The SPV helped raise Adani Group cheap credit, faster, as per a report in The Wire. “This was a huge transaction. Whoever could arrange the money fast and seamlessly was going to have a definite edge over others,” Ketan Mukhija, partner at law firm Link Legal, had told the news outlet at the time, the report added. Ketan, as per the report, had also said that Adani Group’s transaction through an offshore entity will enable them to steer clear of pricing restrictions under the exchange control regulations in India.