'Happy to know unknown foreign funds are controlling sensitive defence contracts ': TMC's Mahua Moitra latest dig on Adani Group, govt

March 18,2023

Trinamool Congress MP Mahua Moitra on Wednesday took a fresh dig at the Centre and government agencies, like Defence Research and Development Organisation (DRDO), for hiding important links between the Adani Group and significant defence contracts of the country. 

The Trinamool legislator in her latest tweet on Wednesday said that the Centre has hidden primary information about country’s defence deals, and said that it is quite alarming to know that unknown foreign funds are controlling sensitive defence contracts. 

Moitra, who has been attacking the Adani Group for various corporate violations after US short seller Hindenburg Research came out with its report on its operations, highlighted a news report in the Indian Express that said that Elara India Opportunities Fund (Elara IOF), a venture capital fund managed by Elara Capital, is a joint owner in the top defence firm controlled by the Adani Group. It said Elara is one of the top four entities registered in Mauritius that hold shares predominantly in Adani Group companies. 

Not only that, the report further stated that Elara IOF is a promoter entity in a defence company, Bengaluru-based Alpha Design Technologies Private Limited (ADTPL), along with the Adani Group.  

Founded in 2003, Alpha Design Technologies works closely with ISRO and DRDO and has signed a Rs 590-crore contract with the Union Ministry of Defence in 2020 to upgrade and digitise the Pechora missile and radar systems. 

As per the Registrar of Companies, Adani Defence Systems and Technologies Ltd holds a 26 per cent stake in Alpha Design Technologies, and together with Elara, it holds a majority of 51.65 per cent in the Bengaluru-based defence company. Elara has invested in Alpha Design Technologies through Vasaka Promoters & Developers. 

As per the Registrar of Companies, Elara has a 44.3 per cent stake in  Vasaka Promoters and Developers, which it bought for Rs 40 crore in 2018.  

Besides, Elara IOF also bought 0.53 per cent directly in Alpha Design Technologies for Rs 7.62 crore on December 1, 2018. Thereby, Elara IOF now holds almost 26 per cent (25.65 per cent) in Alpha Design Technologies. 

ADTPL structure 

As per Alpha Design Technologies, the company is owned by Vasaka Promoters and Developers Pvt Ltd, which had a 56.7 per cent stake in ADTPL as on March 31, 2022. 

In its Annual Report 2020-21, the company said: “The Company is a subsidiary company of Vasaka Promoters & Developers Pvt Ltd by virtue of shareholding. The company is a subsidiary of Adani Defence Systems and Technologies Limited by virtue of control over the composition of the Board of Directors.” 

Operations of Elara Capital  

Elara Capital has been under the lens since Hindenburg Research mentioned about its source of funding. Following the accusations leveled by the Hindenburg report, the Supreme Court of India set up a panel and asked market regulator SEBI to probe the allegations.  

Elara Capital is a big investor in Adani Group companies. As per the latest data shared by the conglomerate, Elara Capital holdings in three Adani companies add up to over Rs 9,000 crore or over 96 per cent of its total corpus in December 2022. 

As per company declarations, over 96 per cent of Elara’s investments in India are through Elara IOF in Adani Group companies. As of December 31, 2022, Elara IOF holds 1.6 per cent in Adani Enterprises, 3.62 per cent in Adani Transmission, and 1.62 per cent in Adani Total. 

 Adani Group’s explanation 

In a statement to the queries of the Indian Express, the Adani Group: “In 2017, Adani Defence was looking for companies which can provide both defence electronics as well as aero-structures capabilities in India. Alpha Design Technologies had capabilities across both electronics as well as aerostructures.” 

“Adani Defence invested in ADTL in 2018… Adani Defence had taken a 26 per cent stake and had invested primary funds to grow the company to the next level. Elara India Opportunities Fund has a minority stake of 0.53 per cent. The largest promoter is Vasaka Promoters & Developers,” the Adani Group said in the statement. 

According to the annual report of Adani Enterprises, ADTPL is engaged in manufacturing satellite and ground equipment, electronic warfare and military communications equipment, and aerospace assembly.  

It operationalised a simulator for the IAF’s MiG-29 aircraft in Adampur under a 20-year Build Operate Maintain contract. 

One of the recent contracts earned by ADTPL was for LWRRs (lightweight radio relays) for the Army.  

ADTPL is also the first Indian offset partner for Israel Aerospace Industries (IAI) for the production of Air Defence Fire Control Radars, 66 of which have been delivered to the Army.