ASIC reviews short seller report on mining giant

While the Hindenburg report focused on the global network of Adani companies and related family businesses in a number of tax havens, it also focused on several of the conglomerate’s transactions in Australia.

Adani operates the Carmichael coal mine in central Queensland under the name Bravus Mining & Resources and has secured a 99-year lease from the Queensland Government for the Abbot Point coal terminal, also known as the North Queensland Export Terminal.

Adani paid $1.8 billion to lease the port in 2011. A year earlier, the company had acquired the Carmichael mine in a $2.7 billion cash and royalty deal, making it the largest single mine investment in Australia by an Indian company.

The Carmichael mine started exporting coal just last year and is ramping up to exporting 10 million tons a year.

The Hidenburg Report claimed that a company owned by an Adani Private Family Trust in a Caribbean tax haven has provided listed Adani Enterprises with a bail of 7.83 billion Indian rupees ($136 million) for use of the North Queensland Export Terminal has invoiced. Disclosure was made in Adani Enterprises Annual Report 2022.

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“It is unclear why a private Adani company is charging the Adani Group’s listed port handling services company in another contentious transaction and withdrawing capital from the public company,” the Hidenburg report said.

The report also questioned the appointment of Gautam Adani’s brother-in-law, Samir Vora, to Australian operations. Last year, Vora became chief executive and country head of Adani Australia, replacing Lucas Dow, a former BHP manager.

The report found that Vora had been accused by India’s tax authority of being involved in a diamond trading scam and providing false information to regulators.

Hidenburg also alleged that between 2013 and 2015 Carmichael Rail and Port Singapore Holdings Pte Ltd, the latter a Singaporean company controlled solely by Vinod Adani, were involved in three transactions that may have resulted in Adani Enterprises recording large impairments of assets avoided.

“In short, Carmichael Rail: acquired assets from publicly traded Adani Enterprises (without disclosure by the publicly traded company), with loans funded by Adani Enterprises (without disclosure by the publicly traded company), and then almost immediately wrote the value of the assets in the same year, potentially allowing Adani Enterprises to avoid a significant loss.”

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