Speaker 1: Bloomberg Audio Studios, podcasts, radio news. In twenty eighteen, Asia's
Speaker 1: second richest man, Galto Madonni, invited his brother's, sons and
Speaker 1: nephews to his home for a meal.
Speaker 2: All seven of them were sitting around the dining table
Speaker 2: having lunch and very unexpectedly.
Speaker 1: Galto Madonni pop the question how do you see the future?
Speaker 2: Do you guys want to carve up the business between
Speaker 2: you or do you want to run the NDAI business
Speaker 2: assist single family.
Speaker 1: The business Galtam was asking them about is the Adanni Group,
Speaker 1: a sprawling conglomate which started with the company set up
Speaker 1: by Galtham and his brothers back in nineteen eighty eight. Today,
Speaker 1: the Adnni Group is worth more than two hundred and
Speaker 1: ten billion US dollars and touches almost every facet of
Speaker 1: daily life in India.
Speaker 2: When you switch on the electric bulb at the home,
Speaker 2: his business is touching your life. When you are buying
Speaker 2: groceries from the shop, his business is touching your life.
Speaker 2: When you are looking to buy a house, his business
Speaker 2: is touching your life.
Speaker 1: Anto Anthony is an editor at Bloomberg News based in
Speaker 1: Mumbai covering South Asia and he says, for years Galtum
Speaker 1: has been essentially the super CEO of the Adanni Group,
Speaker 1: making all the decisions for the entire conglomerate. But now
Speaker 1: he was asking the family members before him, his only
Speaker 1: two sons and two nephews, how they want to run
Speaker 1: the company when he the patriarch, steps down. The question
Speaker 1: surprised the younger Adanni's.
Speaker 2: Because Gadomadani was still in his fifties. None of them
Speaker 2: thought that he's thinking about succession or transition.
Speaker 1: He gave them three months to work it out, and
Speaker 1: when they came back, it was a united front.
Speaker 2: They said that we have seen my father and his
Speaker 2: brothers working together to build up this legacy, and we
Speaker 2: always work grow together, so there was no doubt in
Speaker 2: their mind that they should stay together.
Speaker 1: It's a bold move for a wide ranging group whose
Speaker 1: units span everything from airports to solar farms, and this
Speaker 1: succession is poised to be one of the world's largest
Speaker 1: and most challenging transfers of wealth. Bloomberg sat down with
Speaker 1: Galtam and his four airs for a series of exclusive
Speaker 1: interviews about what this transfer will look like.
Speaker 3: Succession is a very, very important for the business sustainability,
Speaker 3: and it must be is the organic, gradual and a
Speaker 3: very systematic.
Speaker 1: Welcome to The Big Take Asia from Bloomberg News.
Speaker 4: I'm one half.
Speaker 1: Every week we take you inside some of the world's
Speaker 1: biggest and most powerful economies and the markets, tycoons and
Speaker 1: businesses that drive this ever shifting region. Today on the show,
Speaker 1: Bloomberg's exclusive interviews with the Adonis, how the family envisions
Speaker 1: an a Donni group without their patriarch at the helm,
Speaker 1: and what's at stake for India's economy. Galta Madonni's first
Speaker 1: big break came when he decided to help his brother
Speaker 1: with his plastics factory. That's when he got into global
Speaker 1: trading by importing polyvinyl chloride or PVC for his brother's business,
Speaker 1: and it led him to set up his flagship company,
Speaker 1: what would become a Donni Enterprises in nineteen eighty eight.
Speaker 2: That's where he got his first real break. From there,
Speaker 2: he started exploring projects in ports sector. He set up
Speaker 2: Mundra Port, which is as of now one of the
Speaker 2: largest ports in India. After that, we are seeing a
Speaker 2: meteoric growth which really gathered pace after twenty ten. Many
Speaker 2: people say that it is very closely associated to Prime
Speaker 2: Minister Narendra Modi's ascent.
Speaker 1: Adanni's businesses have often been closely aligned with Prime Minister
Speaker 1: Narandro Modi's priorities, and the Adani Group has stepped in
Speaker 1: where the nation lacked resources like an infrastructure and green energy.
Speaker 2: India is a country of one point four billion people,
Speaker 2: but it really lacks infrastructure, whether it is roads, ports, airports. Power.
Speaker 2: Energy is a huge issue out here. There are so
Speaker 2: many millions of household which doesn't have access to electricity.
Speaker 2: So that's how when Gaudamadhani decides to step in and
Speaker 2: help build this infrastructure, his priorities and business interest got
Speaker 2: aligned well with that of the federal or state governments
Speaker 2: in India. So as he himself puts it, when you
Speaker 2: align your interest with the governments, it always gives you
Speaker 2: tailwinds rather than headwinds, and it has really propelled his
Speaker 2: business forwards and along with it his wealth.
Speaker 1: The Adani Group is India's biggest importer of coal, it's
Speaker 1: the largest owner of solar farms, and Adani owned ports
Speaker 1: carry almost half the country's shipping containers, while more than
Speaker 1: ninety million people use their airports each year and for years,
Speaker 1: the Adanni group appeared to flourish with infrastructure projects like these.
Speaker 1: Galtam is currently Asia's second richest man and one of
Speaker 1: the most influential business leaders.
Speaker 4: In the world.
Speaker 1: He's worth more than one hundred billion US dollars. But
Speaker 1: last year something happened that put the Adanni Group's success
Speaker 1: at risk.
Speaker 5: So just to give the high level understanding of who
Speaker 5: Hindenburg Research is.
Speaker 1: In a daring short selling attack, a New York based
Speaker 1: group called Hindenburg Research accused the Adanni Group of the
Speaker 1: largest khan in corporate history.
Speaker 5: It did disclose a short position in a DNI group
Speaker 5: and what it's saying basically is the conglomerate engaged in
Speaker 5: market manipulation and then accounting fraud as well. Now Gotamadani
Speaker 5: has denied this and he says that the report is baseless.
Speaker 1: Hindenberg alleged that the Adani Group had used a web
Speaker 1: of companies in tax evans to inflate its revenue and
Speaker 1: manipulate stock prices. Critics have raised similar questions about the
Speaker 1: conglomerate for years. The group denied all claims and noted
Speaker 1: to Bloomberg that they provided a very long and comprehensive
Speaker 1: response in just seventy two hours on every single point,
Speaker 1: But the crisis came at a very tense moment for
Speaker 1: the Adni Group.
Speaker 2: This came at a time when the group was looking
Speaker 2: at one of the biggest share sales in its history.
Speaker 2: That share sale had to be pulled. The group lost
Speaker 2: a lot in marketcap.
Speaker 4: How much market cap did they lose.
Speaker 2: One hundred and fifty billion dollars in a few months?
Speaker 4: Wow? Huge.
Speaker 2: It took them six months to eight year to asswitch
Speaker 2: all these concerns and regain that market cap.
Speaker 1: The Adanni Group has also faced regulatory probes at home
Speaker 1: and in the US, where prosecutors were investigating whether an
Speaker 1: ADNNI entity, executives linked to the company, or billionaire founder
Speaker 1: Galtum himself had paid bribes to Indian officials in return
Speaker 1: for favorable treatment on a green energy project. The Adanni
Speaker 1: Group said none of its units has been notified of
Speaker 1: the probe and that it's not aware of its chairman
Speaker 1: being part of the investigation. No Adannie unit has been
Speaker 1: charged with wrongdoing by the US Justice Department, and investigations
Speaker 1: don't always lead to prosecutions, but the controversies swirling around
Speaker 1: the conglomerate have prompted some changes there.
Speaker 4: What are they doing differently after Hindenburg.
Speaker 2: So they're cutting down on leverage in a big way.
Speaker 2: They're putting a load of risk mitigation measures in place.
Speaker 2: They're more measured in their approach towards growth and abold,
Speaker 2: They're communicating more.
Speaker 1: And now Anto says he's seen a huge change in
Speaker 1: how the company is trying to be more transparent about
Speaker 1: their operations.
Speaker 2: Till the Hiddenburg report hit, many considered it as an
Speaker 2: opaque group. Many knew nothing about the group or its
Speaker 2: inner workings, the kind of processes they have and so on.
Speaker 2: Now they are very aggressive about communicating, whether it's to
Speaker 2: the investors or media.
Speaker 1: And this newfound openness of the Adanni family to the
Speaker 1: media may have also helped Bloomberg get rare access to
Speaker 1: the tycoon and his family. Anto and a TV crew
Speaker 1: spent nearly a dozen days following leaders of the Adanni Group,
Speaker 1: and while Gothamdani declined to address controversies swirling around his conglomerate,
Speaker 1: he did agree to talk about the family conversations around succession.
Speaker 3: Succession is not en one of the event, but it
Speaker 3: is a long drawn journey and my plan of succession
Speaker 3: started almost decade.
Speaker 1: Ago after the break what the Adani family plans might
Speaker 1: mean for India and the rest of the world. Bloomberg's
Speaker 1: Anto Antony was given unprecedented access to the Dani family.
Speaker 4: He and a.
Speaker 1: TV crew spent nearly two weeks in India visiting the
Speaker 1: headquarters and meeting employees right.
Speaker 2: From the janitor right up to group CEOs.
Speaker 1: And taking field trips to visit their sites.
Speaker 2: We went to a place called Karvda in Gujarat, which
Speaker 2: is a very arid region, it said does, said Ball.
Speaker 2: So what they're trying to do is they're trying to
Speaker 2: cover up the area five times the size of Paris
Speaker 2: with solar panels and win turbines.
Speaker 1: One thing Anta wanted to talk with Galta Madani about
Speaker 1: was why he was planning for succession now when he's
Speaker 1: still very much engaged in the business. Galton told him
Speaker 1: he and his brothers want to be around to help
Speaker 1: the next generation.
Speaker 2: So what Gaudamadani and his two brothers who are involved
Speaker 2: in the business is trying to do is transition it
Speaker 2: into the next generation at a time when they are
Speaker 2: still around to oversee and correct them when needed. This
Speaker 2: is a conglomerate which runs from selling apples to running airports.
Speaker 2: It's a complex set of businesses spread across various sectors.
Speaker 2: So the complexity of this transition is probably the reason
Speaker 2: why he's thinking of it right now.
Speaker 4: And when is he planning to hand over the reins.
Speaker 2: He's sisty to right now. When he's seventy is when
Speaker 2: the transition happens. That's when he will retire. Goadabadani is
Speaker 2: looking at handing over his empire to four successors.
Speaker 1: These four successors Gautam's sons, Goten and Jeet and their
Speaker 1: cousins Pranav and Sagar. Pranav is the eldest among the
Speaker 1: four and he's been in the business for the longest.
Speaker 1: He now oversees most of the Udani Group's consumer businesses,
Speaker 1: including consumer goods, media, and real estate. He's also responsible
Speaker 1: for redeveloping the Darav slum, one of Asia's largest and
Speaker 1: the size of Monaco. It involves relocating a million people
Speaker 1: at the heart of Mumbai who call the slum their home.
Speaker 1: Bloomberg followed Pranav on a visit to the area.
Speaker 2: We saw many of the residents walking up to him.
Speaker 2: One of the key concerns which they had was will
Speaker 2: we get a home right here? They walked up to
Speaker 2: Pranav they shared this concern and when they raised these
Speaker 2: questions with him, he's a smooth talker with an easy
Speaker 2: smile and cool demander, so he will pat them on
Speaker 2: their back, hold their hands.
Speaker 4: Sounds like he's also very much of a politician too.
Speaker 2: If I were to pick one among the four who
Speaker 2: will be able to talk to the people who are
Speaker 2: staying in the slum and top executives or dignitaries in
Speaker 2: the same manner, that would be prun of.
Speaker 1: Next we have Kara Nadani, Gautam Madani's eldest son. Anto
Speaker 1: says he's a huge Formula one fan.
Speaker 2: If you walk into his sophie, you will see a
Speaker 2: lot of replicares of Ferrari cars, scale models of Farari
Speaker 2: cars all over the place.
Speaker 1: And he manages all the ports for the Adani Group.
Speaker 2: He's a no nonsense, driven, passionate guy when it comes
Speaker 2: to business.
Speaker 1: Then we have jet Adani, Galatam's youngest son. He's the
Speaker 1: family's only trained engineer and looks after the group's airports.
Speaker 1: He's also in charge of the digital businesses as well
Speaker 1: as the defense unit, which makes equipment ranging from small
Speaker 1: arms to missiles.
Speaker 2: He's the one who has got most of the mannerisms
Speaker 2: of Gaudamdani, Like he's a very affable guy. But I
Speaker 2: saw that when an executive tell him that something is
Speaker 2: not doable, he just lost his school and raised his voice.
Speaker 2: So I asked him why, and he said that it's
Speaker 2: because his pet peew is that somebody telling him that
Speaker 2: something is not doable without trying it out and giving
Speaker 2: the rational after trying it out.
Speaker 1: Then we have Saga Adani, the youngest nephew, got them.
Speaker 1: He oversees the group's energy business as well as finance.
Speaker 2: He's the face to the investors, like he's mostly traveling,
Speaker 2: like two toy day's a month, he's traveling.
Speaker 1: And how this succession plan will come together? Well, the
Speaker 1: businesses have been split between the four younger Adannis, with
Speaker 1: each heading their own units, but when it comes to
Speaker 1: the decisions that affect the entire group, the four have
Speaker 1: agreed to make the call together. And so how is
Speaker 1: this going to work in reality? Because you've essentially got
Speaker 1: four I mean, who calls a shot if there's a disagreement.
Speaker 2: So they're very clear that there is not going to
Speaker 2: be a first among the equals. All four will have equals,
Speaker 2: say in management. So now if you are to take
Speaker 2: a major strategy decision, then all four has to be
Speaker 2: on board. It is going to be a joint decision making.
Speaker 4: That sounds too good to be true.
Speaker 2: That is what everybody is telling me. Most of the
Speaker 2: succession experts I talked to made that point. Some of
Speaker 2: them even said that you have to work against basic
Speaker 2: instincts of human beings to make this work, because at
Speaker 2: some point meritocracy will come up, some people will be
Speaker 2: more committed to the businesses and will build their businesses
Speaker 2: up in a better way.
Speaker 1: And so did Press Prana the eldest Air on how
Speaker 1: realistic this new joint management structure actually is.
Speaker 2: Transition plans at various large conglomerates had failed due to
Speaker 2: internal officials within the next generation. What plans the group
Speaker 2: is putting in place to make sure that that doesn't happen.
Speaker 6: I don't know if you're aware, but we as a family,
Speaker 6: we have lunch every day together. Chairman, my uncle, my
Speaker 6: father when he is there, and the whole second generation,
Speaker 6: we all actually have lunch together. We discuss issues, so
Speaker 6: there's a lot of communication happening. Having said that, everyone
Speaker 6: is of course looking at different businesses, and though we
Speaker 6: are looking at different businesses, we are like one team
Speaker 6: when it comes to discussions like talent management, how we
Speaker 6: look at the future of the company.
Speaker 1: And when it comes to Galtam's personal fortunes some one
Speaker 1: hundred billion dollars of it, Anto sources told them it
Speaker 1: would also be split equally among the four.
Speaker 2: All this is held through a trust, the family Trust,
Speaker 2: and areas down the line, when god Madani turns seventy,
Speaker 2: each of the second generation will become an equal beneficiary
Speaker 2: of that trust. If we were doing it today, each
Speaker 2: of them could have got about twenty five billion dollars.
Speaker 2: But then we have to keep in mind the meteoric
Speaker 2: rise in wealth of the group. So seven years down
Speaker 2: the line, it is anybody's guess what they will be inherited.
Speaker 1: Center billionaires for sure, and Anto says this humongous wealth
Speaker 1: transfer and leadership transition doesn't just concern this single family.
Speaker 1: There's far reaching ramifications for India's three point five trillion
Speaker 1: dollar economy and its future development. One reason for that
Speaker 1: is that the Idani group has played such a key
Speaker 1: role in helping India shore up its infrastructure.
Speaker 2: There's a lot of deficiencies in the infrastructure, so Adani
Speaker 2: is somebody who has come up and has been trying
Speaker 2: to plug that gap. We haven't seen anybody trying to
Speaker 2: do with at this scale ever in independent India's history.
Speaker 2: So his success is very important because if he succeeds,
Speaker 2: then India will be able to grow at a faster pace.
Speaker 2: And India growing at a faster pace and living up
Speaker 2: to his potential is quite important for the global economy
Speaker 2: also because as the powerhouses like China to Germany are
Speaker 2: facing its own issues and brokerage Houses has been pointing
Speaker 2: out that India is among the countries which has to
Speaker 2: contribute most to pull up the slack. So not only
Speaker 2: for India, but even for the global economy, it is
Speaker 2: quite important that this succession plan succeeds.
Speaker 1: And what about galtem If this all goes well.
Speaker 2: Once a transition is complete and once you have more
Speaker 2: time at hand, what would be your plans?
Speaker 3: Oh, ultimately we will retire more relax.
Speaker 1: This is the big take Asia from Bloomberg News.
Speaker 4: I'm wanha.
Speaker 1: This episode was produced by Young Young Naomi m Jessica Beck,
Speaker 1: and Alex Sugia, who also mixed it. It was fact
Speaker 1: checked by Naomi and edited by Caitlin Kenny and Alyssa McDonald.
Speaker 1: Our senior producers are name Is Shaven and Kim Gettlson.
Speaker 1: Our senior editor is Elizabeth Ponso. Nicole Beemster Bower is
Speaker 1: our executive producer, and Sage Bowman is Blomberg's head of podcasts.
Speaker 1: Please follow and review The Big Take Asia wherever you
Speaker 1: listen to podcasts. It helps new listeners find the show.
Speaker 1: See you next time.