Adani group's Australian railway partner revealed

The Morning Context has uncovered a clear lack of acknowledgement by the Adani Group regarding a major investor in its rail project in Australia. The report reveals that the "unknown" investor is, in fact, a Singapore-based company, previously run by Gautam Adani's older brother, Vinod, until February of this year.

The distance between the mine and the train station exceeded 200 km, posing a major logistical challenge for the operation. Once the coal reached the port, it would be loaded onto bulk carriers bound for India.

Originally housed at Carmichael Rail and Port Singapore Holdings Pte, a company where Vinod served as a director, the rail project was intended to connect the Carmichael coal mine in Queensland with the port of Abbot Point.

The report highlights that Adani Enterprises' annual reports since 2017 have presented a mixed picture of Adani Global Resources Pte (AGRPTE) ownership and its association with the Carmichael rail project. While Adani Enterprises claims 100% equity interest in AGRPTE, it also discloses it as a joint venture with 50% beneficial ownership, leading to ambiguity and lack of further explanation.

Closer examination of the company's annual reports reveals that the unknown investor owns a convertible note, giving him the right to convert the debt into equity. Adani Enterprises had not previously disclosed the presence of such an investor. However, in response to inquiries from The Morning Context, the company confirmed on May 8 that it was indeed Carmichael Rail and Port Singapore Holdings, the same entity from which the project was acquired.

The decision to withhold information about Adani Enterprises' partner in such a major infrastructure project raises concerns about the group's liability and its inability to clarify the deal to investors or reveal the identity of the note holder.

Experts cited by The Morning Context emphasize that the transactions of a foreign subsidiary can be disclosed according to the rules of the country in which it operates. However, it remains unclear whether AGRPTE is a 100% or 50% owned entity by Adani, as Adani Enterprises has described it as both in its annual reports.

Furthermore, the report highlights that in Singapore, neither Adani Global Pte nor Adani Global Resources Pte refer to their connection as a joint venture with a 50% stake. Adani Global reports a 100% equity interest in AGRPTE in its fiscal 2019 and 2021 reports, notably omitting AGRPTE from its list of joint ventures.

The Morning Context investigation also reveals that Adani Enterprises' related party transactions for 2017-18 made no mention of holding the note, and subsequent annual reports provide no information about the issuance of the note or the identity of its holder.

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