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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. In twenty eighteen, Asia's

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Speaker 1: second richest man, Galto Madonni, invited his brother's, sons and

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Speaker 1: nephews to his home for a meal.

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Speaker 2: All seven of them were sitting around the dining table

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Speaker 2: having lunch and very unexpectedly.

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Speaker 1: Galto Madonni pop the question how do you see the future?

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Speaker 2: Do you guys want to carve up the business between

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Speaker 2: you or do you want to run the NDAI business

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Speaker 2: assist single family.

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Speaker 1: The business Galtam was asking them about is the Adanni Group,

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Speaker 1: a sprawling conglomate which started with the company set up

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Speaker 1: by Galtham and his brothers back in nineteen eighty eight. Today,

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Speaker 1: the Adnni Group is worth more than two hundred and

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Speaker 1: ten billion US dollars and touches almost every facet of

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Speaker 1: daily life in India.

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Speaker 2: When you switch on the electric bulb at the home,

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Speaker 2: his business is touching your life. When you are buying

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Speaker 2: groceries from the shop, his business is touching your life.

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Speaker 2: When you are looking to buy a house, his business

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Speaker 2: is touching your life.

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Speaker 1: Anto Anthony is an editor at Bloomberg News based in

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Speaker 1: Mumbai covering South Asia and he says, for years Galtum

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Speaker 1: has been essentially the super CEO of the Adanni Group,

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Speaker 1: making all the decisions for the entire conglomerate. But now

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Speaker 1: he was asking the family members before him, his only

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Speaker 1: two sons and two nephews, how they want to run

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Speaker 1: the company when he the patriarch, steps down. The question

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Speaker 1: surprised the younger Adanni's.

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Speaker 2: Because Gadomadani was still in his fifties. None of them

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Speaker 2: thought that he's thinking about succession or transition.

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Speaker 1: He gave them three months to work it out, and

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Speaker 1: when they came back, it was a united front.

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Speaker 2: They said that we have seen my father and his

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Speaker 2: brothers working together to build up this legacy, and we

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Speaker 2: always work grow together, so there was no doubt in

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Speaker 2: their mind that they should stay together.

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Speaker 1: It's a bold move for a wide ranging group whose

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Speaker 1: units span everything from airports to solar farms, and this

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Speaker 1: succession is poised to be one of the world's largest

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Speaker 1: and most challenging transfers of wealth. Bloomberg sat down with

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Speaker 1: Galtam and his four airs for a series of exclusive

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Speaker 1: interviews about what this transfer will look like.

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Speaker 3: Succession is a very, very important for the business sustainability,

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Speaker 3: and it must be is the organic, gradual and a

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Speaker 3: very systematic.

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Speaker 1: Welcome to The Big Take Asia from Bloomberg News.

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Speaker 4: I'm one half.

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Speaker 1: Every week we take you inside some of the world's

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Speaker 1: biggest and most powerful economies and the markets, tycoons and

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Speaker 1: businesses that drive this ever shifting region. Today on the show,

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Speaker 1: Bloomberg's exclusive interviews with the Adonis, how the family envisions

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Speaker 1: an a Donni group without their patriarch at the helm,

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Speaker 1: and what's at stake for India's economy. Galta Madonni's first

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Speaker 1: big break came when he decided to help his brother

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Speaker 1: with his plastics factory. That's when he got into global

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Speaker 1: trading by importing polyvinyl chloride or PVC for his brother's business,

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Speaker 1: and it led him to set up his flagship company,

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Speaker 1: what would become a Donni Enterprises in nineteen eighty eight.

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Speaker 2: That's where he got his first real break. From there,

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Speaker 2: he started exploring projects in ports sector. He set up

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Speaker 2: Mundra Port, which is as of now one of the

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Speaker 2: largest ports in India. After that, we are seeing a

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Speaker 2: meteoric growth which really gathered pace after twenty ten. Many

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Speaker 2: people say that it is very closely associated to Prime

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Speaker 2: Minister Narendra Modi's ascent.

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Speaker 1: Adanni's businesses have often been closely aligned with Prime Minister

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Speaker 1: Narandro Modi's priorities, and the Adani Group has stepped in

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Speaker 1: where the nation lacked resources like an infrastructure and green energy.

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Speaker 2: India is a country of one point four billion people,

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Speaker 2: but it really lacks infrastructure, whether it is roads, ports, airports. Power.

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Speaker 2: Energy is a huge issue out here. There are so

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Speaker 2: many millions of household which doesn't have access to electricity.

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Speaker 2: So that's how when Gaudamadhani decides to step in and

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Speaker 2: help build this infrastructure, his priorities and business interest got

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Speaker 2: aligned well with that of the federal or state governments

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Speaker 2: in India. So as he himself puts it, when you

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Speaker 2: align your interest with the governments, it always gives you

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Speaker 2: tailwinds rather than headwinds, and it has really propelled his

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Speaker 2: business forwards and along with it his wealth.

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Speaker 1: The Adani Group is India's biggest importer of coal, it's

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Speaker 1: the largest owner of solar farms, and Adani owned ports

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Speaker 1: carry almost half the country's shipping containers, while more than

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Speaker 1: ninety million people use their airports each year and for years,

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Speaker 1: the Adanni group appeared to flourish with infrastructure projects like these.

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Speaker 1: Galtam is currently Asia's second richest man and one of

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Speaker 1: the most influential business leaders.

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Speaker 4: In the world.

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Speaker 1: He's worth more than one hundred billion US dollars. But

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Speaker 1: last year something happened that put the Adanni Group's success

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Speaker 1: at risk.

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Speaker 5: So just to give the high level understanding of who

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Speaker 5: Hindenburg Research is.

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Speaker 1: In a daring short selling attack, a New York based

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Speaker 1: group called Hindenburg Research accused the Adanni Group of the

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Speaker 1: largest khan in corporate history.

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Speaker 5: It did disclose a short position in a DNI group

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Speaker 5: and what it's saying basically is the conglomerate engaged in

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Speaker 5: market manipulation and then accounting fraud as well. Now Gotamadani

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Speaker 5: has denied this and he says that the report is baseless.

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Speaker 1: Hindenberg alleged that the Adani Group had used a web

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Speaker 1: of companies in tax evans to inflate its revenue and

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Speaker 1: manipulate stock prices. Critics have raised similar questions about the

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Speaker 1: conglomerate for years. The group denied all claims and noted

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Speaker 1: to Bloomberg that they provided a very long and comprehensive

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Speaker 1: response in just seventy two hours on every single point,

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Speaker 1: But the crisis came at a very tense moment for

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Speaker 1: the Adni Group.

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Speaker 2: This came at a time when the group was looking

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Speaker 2: at one of the biggest share sales in its history.

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Speaker 2: That share sale had to be pulled. The group lost

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Speaker 2: a lot in marketcap.

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Speaker 4: How much market cap did they lose.

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Speaker 2: One hundred and fifty billion dollars in a few months?

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Speaker 4: Wow? Huge.

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Speaker 2: It took them six months to eight year to asswitch

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Speaker 2: all these concerns and regain that market cap.

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Speaker 1: The Adanni Group has also faced regulatory probes at home

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Speaker 1: and in the US, where prosecutors were investigating whether an

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Speaker 1: ADNNI entity, executives linked to the company, or billionaire founder

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Speaker 1: Galtum himself had paid bribes to Indian officials in return

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Speaker 1: for favorable treatment on a green energy project. The Adanni

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Speaker 1: Group said none of its units has been notified of

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Speaker 1: the probe and that it's not aware of its chairman

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Speaker 1: being part of the investigation. No Adannie unit has been

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Speaker 1: charged with wrongdoing by the US Justice Department, and investigations

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Speaker 1: don't always lead to prosecutions, but the controversies swirling around

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Speaker 1: the conglomerate have prompted some changes there.

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Speaker 4: What are they doing differently after Hindenburg.

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Speaker 2: So they're cutting down on leverage in a big way.

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Speaker 2: They're putting a load of risk mitigation measures in place.

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Speaker 2: They're more measured in their approach towards growth and abold,

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Speaker 2: They're communicating more.

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Speaker 1: And now Anto says he's seen a huge change in

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Speaker 1: how the company is trying to be more transparent about

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Speaker 1: their operations.

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Speaker 2: Till the Hiddenburg report hit, many considered it as an

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Speaker 2: opaque group. Many knew nothing about the group or its

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Speaker 2: inner workings, the kind of processes they have and so on.

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Speaker 2: Now they are very aggressive about communicating, whether it's to

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Speaker 2: the investors or media.

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Speaker 1: And this newfound openness of the Adanni family to the

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Speaker 1: media may have also helped Bloomberg get rare access to

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Speaker 1: the tycoon and his family. Anto and a TV crew

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Speaker 1: spent nearly a dozen days following leaders of the Adanni Group,

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Speaker 1: and while Gothamdani declined to address controversies swirling around his conglomerate,

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Speaker 1: he did agree to talk about the family conversations around succession.

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Speaker 3: Succession is not en one of the event, but it

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Speaker 3: is a long drawn journey and my plan of succession

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Speaker 3: started almost decade.

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Speaker 1: Ago after the break what the Adani family plans might

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Speaker 1: mean for India and the rest of the world. Bloomberg's

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Speaker 1: Anto Antony was given unprecedented access to the Dani family.

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Speaker 4: He and a.

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Speaker 1: TV crew spent nearly two weeks in India visiting the

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Speaker 1: headquarters and meeting employees right.

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Speaker 2: From the janitor right up to group CEOs.

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Speaker 1: And taking field trips to visit their sites.

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Speaker 2: We went to a place called Karvda in Gujarat, which

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Speaker 2: is a very arid region, it said does, said Ball.

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Speaker 2: So what they're trying to do is they're trying to

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Speaker 2: cover up the area five times the size of Paris

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Speaker 2: with solar panels and win turbines.

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Speaker 1: One thing Anta wanted to talk with Galta Madani about

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Speaker 1: was why he was planning for succession now when he's

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Speaker 1: still very much engaged in the business. Galton told him

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Speaker 1: he and his brothers want to be around to help

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Speaker 1: the next generation.

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Speaker 2: So what Gaudamadani and his two brothers who are involved

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Speaker 2: in the business is trying to do is transition it

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Speaker 2: into the next generation at a time when they are

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Speaker 2: still around to oversee and correct them when needed. This

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Speaker 2: is a conglomerate which runs from selling apples to running airports.

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Speaker 2: It's a complex set of businesses spread across various sectors.

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Speaker 2: So the complexity of this transition is probably the reason

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Speaker 2: why he's thinking of it right now.

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Speaker 4: And when is he planning to hand over the reins.

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Speaker 2: He's sisty to right now. When he's seventy is when

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Speaker 2: the transition happens. That's when he will retire. Goadabadani is

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Speaker 2: looking at handing over his empire to four successors.

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Speaker 1: These four successors Gautam's sons, Goten and Jeet and their

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Speaker 1: cousins Pranav and Sagar. Pranav is the eldest among the

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Speaker 1: four and he's been in the business for the longest.

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Speaker 1: He now oversees most of the Udani Group's consumer businesses,

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Speaker 1: including consumer goods, media, and real estate. He's also responsible

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Speaker 1: for redeveloping the Darav slum, one of Asia's largest and

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Speaker 1: the size of Monaco. It involves relocating a million people

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Speaker 1: at the heart of Mumbai who call the slum their home.

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Speaker 1: Bloomberg followed Pranav on a visit to the area.

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Speaker 2: We saw many of the residents walking up to him.

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Speaker 2: One of the key concerns which they had was will

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Speaker 2: we get a home right here? They walked up to

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Speaker 2: Pranav they shared this concern and when they raised these

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Speaker 2: questions with him, he's a smooth talker with an easy

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Speaker 2: smile and cool demander, so he will pat them on

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Speaker 2: their back, hold their hands.

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Speaker 4: Sounds like he's also very much of a politician too.

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Speaker 2: If I were to pick one among the four who

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Speaker 2: will be able to talk to the people who are

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Speaker 2: staying in the slum and top executives or dignitaries in

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Speaker 2: the same manner, that would be prun of.

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Speaker 1: Next we have Kara Nadani, Gautam Madani's eldest son. Anto

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Speaker 1: says he's a huge Formula one fan.

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Speaker 2: If you walk into his sophie, you will see a

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Speaker 2: lot of replicares of Ferrari cars, scale models of Farari

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Speaker 2: cars all over the place.

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Speaker 1: And he manages all the ports for the Adani Group.

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Speaker 2: He's a no nonsense, driven, passionate guy when it comes

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Speaker 2: to business.

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Speaker 1: Then we have jet Adani, Galatam's youngest son. He's the

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Speaker 1: family's only trained engineer and looks after the group's airports.

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Speaker 1: He's also in charge of the digital businesses as well

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Speaker 1: as the defense unit, which makes equipment ranging from small

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Speaker 1: arms to missiles.

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Speaker 2: He's the one who has got most of the mannerisms

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Speaker 2: of Gaudamdani, Like he's a very affable guy. But I

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Speaker 2: saw that when an executive tell him that something is

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Speaker 2: not doable, he just lost his school and raised his voice.

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Speaker 2: So I asked him why, and he said that it's

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Speaker 2: because his pet peew is that somebody telling him that

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Speaker 2: something is not doable without trying it out and giving

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Speaker 2: the rational after trying it out.

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Speaker 1: Then we have Saga Adani, the youngest nephew, got them.

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Speaker 1: He oversees the group's energy business as well as finance.

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Speaker 2: He's the face to the investors, like he's mostly traveling,

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Speaker 2: like two toy day's a month, he's traveling.

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Speaker 1: And how this succession plan will come together? Well, the

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Speaker 1: businesses have been split between the four younger Adannis, with

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Speaker 1: each heading their own units, but when it comes to

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Speaker 1: the decisions that affect the entire group, the four have

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Speaker 1: agreed to make the call together. And so how is

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Speaker 1: this going to work in reality? Because you've essentially got

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Speaker 1: four I mean, who calls a shot if there's a disagreement.

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Speaker 2: So they're very clear that there is not going to

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Speaker 2: be a first among the equals. All four will have equals,

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Speaker 2: say in management. So now if you are to take

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Speaker 2: a major strategy decision, then all four has to be

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Speaker 2: on board. It is going to be a joint decision making.

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Speaker 4: That sounds too good to be true.

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Speaker 2: That is what everybody is telling me. Most of the

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Speaker 2: succession experts I talked to made that point. Some of

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Speaker 2: them even said that you have to work against basic

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Speaker 2: instincts of human beings to make this work, because at

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Speaker 2: some point meritocracy will come up, some people will be

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Speaker 2: more committed to the businesses and will build their businesses

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Speaker 2: up in a better way.

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Speaker 1: And so did Press Prana the eldest Air on how

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Speaker 1: realistic this new joint management structure actually is.

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Speaker 2: Transition plans at various large conglomerates had failed due to

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Speaker 2: internal officials within the next generation. What plans the group

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Speaker 2: is putting in place to make sure that that doesn't happen.

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Speaker 6: I don't know if you're aware, but we as a family,

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Speaker 6: we have lunch every day together. Chairman, my uncle, my

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Speaker 6: father when he is there, and the whole second generation,

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Speaker 6: we all actually have lunch together. We discuss issues, so

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Speaker 6: there's a lot of communication happening. Having said that, everyone

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Speaker 6: is of course looking at different businesses, and though we

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Speaker 6: are looking at different businesses, we are like one team

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Speaker 6: when it comes to discussions like talent management, how we

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Speaker 6: look at the future of the company.

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Speaker 1: And when it comes to Galtam's personal fortunes some one

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Speaker 1: hundred billion dollars of it, Anto sources told them it

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Speaker 1: would also be split equally among the four.

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Speaker 2: All this is held through a trust, the family Trust,

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Speaker 2: and areas down the line, when god Madani turns seventy,

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Speaker 2: each of the second generation will become an equal beneficiary

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Speaker 2: of that trust. If we were doing it today, each

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Speaker 2: of them could have got about twenty five billion dollars.

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Speaker 2: But then we have to keep in mind the meteoric

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Speaker 2: rise in wealth of the group. So seven years down

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Speaker 2: the line, it is anybody's guess what they will be inherited.

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Speaker 1: Center billionaires for sure, and Anto says this humongous wealth

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Speaker 1: transfer and leadership transition doesn't just concern this single family.

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Speaker 1: There's far reaching ramifications for India's three point five trillion

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Speaker 1: dollar economy and its future development. One reason for that

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Speaker 1: is that the Idani group has played such a key

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Speaker 1: role in helping India shore up its infrastructure.

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Speaker 2: There's a lot of deficiencies in the infrastructure, so Adani

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Speaker 2: is somebody who has come up and has been trying

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Speaker 2: to plug that gap. We haven't seen anybody trying to

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Speaker 2: do with at this scale ever in independent India's history.

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Speaker 2: So his success is very important because if he succeeds,

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Speaker 2: then India will be able to grow at a faster pace.

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Speaker 2: And India growing at a faster pace and living up

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Speaker 2: to his potential is quite important for the global economy

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Speaker 2: also because as the powerhouses like China to Germany are

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Speaker 2: facing its own issues and brokerage Houses has been pointing

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Speaker 2: out that India is among the countries which has to

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Speaker 2: contribute most to pull up the slack. So not only

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Speaker 2: for India, but even for the global economy, it is

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Speaker 2: quite important that this succession plan succeeds.

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Speaker 1: And what about galtem If this all goes well.

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Speaker 2: Once a transition is complete and once you have more

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Speaker 2: time at hand, what would be your plans?

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Speaker 3: Oh, ultimately we will retire more relax.

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Speaker 1: This is the big take Asia from Bloomberg News.

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Speaker 4: I'm wanha.

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Speaker 1: This episode was produced by Young Young Naomi m Jessica Beck,

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Speaker 1: and Alex Sugia, who also mixed it. It was fact

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Speaker 1: checked by Naomi and edited by Caitlin Kenny and Alyssa McDonald.

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Speaker 1: Our senior producers are name Is Shaven and Kim Gettlson.

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Speaker 1: Our senior editor is Elizabeth Ponso. Nicole Beemster Bower is

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Speaker 1: our executive producer, and Sage Bowman is Blomberg's head of podcasts.

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Speaker 1: Please follow and review The Big Take Asia wherever you

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Speaker 1: listen to podcasts. It helps new listeners find the show.

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Speaker 1: See you next time.