Tale of interlocking shareholding and camaraderie (Defence Network-II)

When Alpha Design Technologies Pvt Ltd and Adani Defence and Aerospace Ltd joined hands for a Navy chopper upgrade project, it was a strategic partnership.

Alpha Design Technologies had the industrial licences to manufacture defence equipment in India. It had got several big defence contracts from the Ministry of Defence in past years and also from foreign vendors setting up joint ventures to meet the requirements of the defence procurement policy.

Alpha Design Technologies is a front company of Sudhir Choudhrie, India's biggest arms dealer. It is at the head of a set of companies that show interlocking shareholding as one of their features. It also shows how they represent a closed group with Choudhrie as the main link.

In financial year 2013-14, three Kolkata-based companies had subscribed to preferential shares and debentures of Alpha Design Technologies. These were Midpoint Marketing Pvt Ltd, Fleeting Vyapaar Pvt Ltd and Rainbow Digital Services Pvt Ltd. Midpoint Marketing later transferred 66 lakh shares to Baron Consultants Pvt Ltd.

Then in financial year 2017-18, the preferential shares of Midpoint Marketing and Baron Consultants were converted to equity shares of Rs 10 each at a premium of Rs 26.65 and the convertible debentures held by Fleeting Vyapaar were also converted into equity shares of Rs 10 each at a premium of Rs 26.65.

In March 2018, all equity shares held by the three companies -- Midpoint Marketing, Baron Consultants and Fleeting Vyapaar -- were transferred to One Earth Capital, Mauritius, a foreign institutional investor.

Interestingly, Midpoint Marketing Private Ltd, Baron Consultants Private Ltd and Fleeting Vyapas Private Ltd have interlocking shareholding among themselves. They comprise individual shareholders who are close associates of arms dealer Sudhir Choudhrie. Importantly, they have common directors -- Avichal Malik and Harvinder Singh Khurana.

Malik and Khurana are part of the Choudhrie enterprise. An IANS investigation has revealed that Malik is on the board companies managed by Choudhrie's family and is a project coordinator at Shanti Hospitality Private Ltd managed by Sudhir Choudhrie's son, Dhairya.

Khurana is on the board of several companies owned and managed by the Choudhries. He is also a partner in the chartered accountancy firm J.P. Kapur and Uberai. Like Khurana, Gurmeet Singh Uberai is also on the board of several Choudhrie firms.

This becomes important against the backdrop of the fact that One Earth Capital, Mauritius held 13.98 per cent in Alpha Design Technologies.

Midpoint Marketing Private Ltd, Baron Consultants Private Ltd and Fleeting Vyapas Private Ltd also invested Rs 12.90 crore in convertible debentures of Vasaka Promoters and Developers Pvt Ltd, one of the key shareholders in Alpha Design Technologies.

The acquisition of Alpha Design Technologies by Adani Defence Systems -- it is a wholly-owned arm of Adani Enterprises -- introduces it to a wide network of business. Some of that becomes evident on profiling two Choudhrie scions, Bhanu and his brother Dhairya.

Bhanu Choudhrie's role was to provide investment strategy to the business by sourcing deals in emerging markets and identifying potential markets. Dhairya has been managing director of Shanti Hospitality which owns 17 hotels. Right now, though, the main focus of Adani Defence Systems appears to be defence contracts, for which the properties of Alpha Design Technologies are expected to be leveraged.

(Ananda Majumdar can be contacted at ananda.m@ians.in)

--IANS

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