Web of Australian Adani solar companies leads to offshore tax havens

Three business are ultimately owned in the Cayman and the British

Virgin Islands, raising questions about the tax implications of revenues created by solar assets

Joshua Robertson

@jrojourno
Wed 18 Oct 2017 02.01 BST Last modified on Wed 18 Oct 2017 02.03 BST
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Australian prime minister Malcolm Turnbull (right) meets India’s Adani Group creator and chairman Gautam Adani in April.
Australian prime minister Malcolm Turnbull (right) consults with India’s Adani Group creator and chairman Gautam Adani in April. Picture: Mick Tsikas/AAP
Adani has actually spread its use of offshore tax havens to its Australian solar tasks, providing another opportunity that could enable the wealthy Indian household behind the multinational to minimize tax paid on earnings from local operations legally.

Six business connected to Adani’s renewables service, which chairman Gautam Adani wishes to make the greatest in Australia by 2022, were registered with the Australian Securities and Investments Commission on 3 August.

The companies all have Australian-based Adani executives as directors. But they fall into 2 groups– three companies in each– which follow a considerably various course to their ultimate owners.

One trail leads back to Adani Enterprises, the stock market-listed company in India which is vying to build Australia’s biggest coal mine, and in which the Adani family are the significant shareholders.

The other bypasses the public company in India entirely, leading back to the Adani household using privately owned business based in the Cayman and British Virgin islands, identified tax sanctuaries.

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The companies were registered a month before the energy giant stated it would proceed with “among the world’s most innovative solar power plants” at Rugby Run near Moranbah, the biggest of three plants Adani proposes in central Queensland and South Australia.

Gautam Adani trumpeted the group’s

Australian solar ambitions when announcing a power purchasing arrangement for Rugby Run with an unnamed but “considerable power retailer.”

” We are the largest generator of solar energy in India, and we intend to reproduce that in Australia,” he said.

Adani bought Rugby Run– a previous livestock residential or commercial property when earmarked as a railroad for transferring coal from its controversial Carmichael mine– for $1 on 9 June in 2015 from Queensland beef barons the Acton household, transfer files reveal.

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The website gives its name to among 3 companies that indicate the start of the tax sanctuary trail from the Australian solar company: Adani Rugby Run Operations Pty Ltd, Adani Renewable Operations Pty Ltd, and Adani Renewable Operations Holdings Pty Ltd.

. All 3 companies have a mom and dad company in Singapore, Global Renewable Energy Holding Pte Ltd, which was integrated in January with Vinod Shantilal Adani as sole director.

Singapore company filings show International Renewable resource Holding Pte Ltd is owned by Atulya Resources Ltd in the Cayman Islands. Atulya Resources is in turn owned by ARFT Holding Ltd in the British Virgin Islands. Documents held by the Singapore corporate regulator reveal that “the Adani Household” is a supreme shareholder of ARFT Holding Ltd.

. Back in Australia, the other 3 business registered in August were Adani Renewable Assets, Adani Renewable Asset Holdings, and Adani Rugby Run.

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They are held by Adani Global Pte Ltd in Singapore, which is held by Adani Global Ltd in Mauritius, in turn, owned by the public company Adani Enterprises Ltd in India.

Adam Walters, the principal researcher for Energy Resource Insights, who discovered the new tax haven links, said Adani’s use of tax sanctuaries and parallel company structures was completely legal.

However, he stated they could make it possible for the Adani household to produce income from operating the solar farms, via agreements with the general public Indian moms and dad business that owned the possessions. These earnings might then be carried to the Adani family via the Cayman and British Virgin Islands, which would have favorable tax implications for them, Walters said.

” Instead of benefit because of their shareholdings in listed business in India where they have to pay lots of tax, they might benefit using the British Virgin Islands,” he stated.

” What might well hold

true is the listed business have actually got the money behind them, they can construct the important things, but then the earnings can be produced in the family-owned businesses.”

Walters said this was a pattern suggested elsewhere in Adani’s business structures around Australian mine and rail jobs.

It occurred when Adani Mining had an opportunity to get rid of a future liability worth billions, in the form of a $2 a tonne royalty deed held by the original owner of the Carmichael mine site, Linc Energy.

When a distressed Linc agreed to unload the deed for $150m in 2014, it was not Adani Mining that bought it. Instead, Adani Mining lent $150m to an Adani family-held trust, connected to the rail job, to snap it up.

” This suggests that the household could possibly receive over a billion dollars in the Caribbean even if the mine is unprofitable in Australia,” Walters said.

” Adani Mining, rather than spending $150m, now have an IOU on their balance sheet for $150m. In the short-term, the business looks healthier than it actually is and in the longer term, if the mine does go on, then the Adani family make money.”

The trust that might enhance the family through coal royalties is held using the same tax sanctuary business as the solar business.

The $150m was one of some multimillion-dollar loans in Australia by public Adani company subsidiaries to personal Adani family-owned business.

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“If [the solar organization] is the same as elsewhere, we understand the Adani family has not really put a single dollar into Australia– they’re inter-company loans to the household from the noted company,” Walters stated.

He said there were another 3 trusts registered by Adani in Australia around the solar jobs, however, “useful ownership of these remains uncertain at this phase.”

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