Even as Adani Group continues to battle the fallout of US short seller Hindenburg’s allegations, the conglomerate getting a coal mine at an auction has come under the scanner on Tuesday.
Last month, Adani picked up four coal blocks during commercial auctions held by government, ouf of which the block called North West of Madheri saw only one other bidder, Cavill Mining Private Limited, reported Scroll on Tuesday.
The owner of Cavill Mining is also the main promoter of Adicorp Enterprises, a small privately-held company that Hindenburg alleged was used to funnel funds between Adani companies.
Hindenburg’s report released on January 24 eroded more than $100 billion in the value of shares in Adani firms and forced it to scale back some of its aggressive expansion plans.
According to corporate filings, Adicorp and Cavill Mining share the same Ahmedabad location and promoter, Utkarsh Shah.
Shah appears in a recently released biography of Adani Group founder Gautam Adani as a friend who can’t keep up with him at sudoku games.
His recently formed business, Cavill Mining, which had a paid-up capital of Rs 1 lakh and no prior mining experience, was in a competition for the right to mine the North West of Madheri block with an Adani affiliate, MH Natural Resources Private Ltd, the report said. The block, which is located Chandrapur, Maharashtra, contains 200 million tonnes of coal.
Cavill Mining’s participation ensured that the auction for North West of Madheri was completed successfully. As per Coal Ministry’s rules, the auction for a commercial mine, on the first attempt, is valid only if there are at least two bidders.
Meanwhile, another report said a joint venture of Adani Group is in talks with about half a dozen banks for a loan of about $220 million, which will be its first since short-seller Hindenburg released a damaging report on it this year.
Data centre provider AdaniConneX, a joint venture with Virginia-based EdgeConneX, will use the money for capital expenditure, with a five-year tenor under discussion, reported Bloomberg. The loan may be signed in the next few weeks, the report added.