$200 Billion, Four Heirs And One Mighty Empire

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We've all heard succession stories gone wrong, families and businesses torn apart by battles over control. But there's another succession story unfolding in India right now that looks very different. Bloomberg spent nearly two weeks with the Adonis, the family

In twenty eighteen, Asia's second richest man, Galto Madonni, invited his brother's sons and nephews to his home for a meal.

All seven of them were sitting around the dining table having lunch, and very unexpectedly.

Galto Madanni pop the question, how do you see the future?

Do you guys want to carve up the business between you or do you want to run the anti business ass a single family.

The business Galtam was asking them about is the Adanni Group, a sprawling conglomerate which started with the company set up by Galtham and his brothers back in nineteen eighty eight. Today, the Adnni Group is worth more than two hundred and ten billion US dollars and touches almost every facet of daily life in India.

When you switch on the electric bulb at the home, his business is touching your life. When you are buying groceries from the shop, his business is touching your life. When you are looking to buy a house, his business is touching your life.

Anto Anthony is an editor at Bloomberg News based in Mumbai, covering South Asia, and he says, for years Galtum has been essentially the super CEO of the Adnni Group, making all the decisions for the entire conglomerate. But now he was asking the family members before him, his only two sons and two nephews, how they want to run the company when he the patriarch, steps down. The question surprised the younger Adanni's.

Because Godo Madani was still in his fifties. None of them thought that he's thinking about succession or transition.

He gave them three months to work it out and when they came back, it was a united front.

They said that we have seen my father and his brothers working together to build up this legacy, and we always work grew together, so there was no doubt in their mind that they should stay together.

It's a bold move for a wide ranging group whose units span everything from airports to solar farms, and this succession is poised to be one of the world's largest and most challenging transfers of wealth. Bloomberg sat down with Galtum and his four heirs for a series of exclusive interviews about what this transfer will look like.

Succession is a very very important for the business sustainability and it must be is the organic, gradual and now very systematic.

Welcome to The Big Take Asia from Bloomberg News. I'm wan Haf. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today on the show, Bloomberg's exclusive interviews with the Adonis, how the family envisions an Adanni group without their patriarch at the helm, and what's at stake for India's economy. Galta Madonni's first big break came when he decided to help

That's where he got his first real break. From there, he started exploring projects in ports sector. He set up Mundra Port which is as of now one of the largest ports in India. After that, we are seeing a meteoric growth which really gathered pace after twenty ten. Many people say that it is very closely associated to Prime Minister Naredra Modi's ascent.

Adani's businesses have often been closely aligned with Prime Minister Narendra Modi's priorities and the Adani Group has stepped in where the nation lacked resources like an infrastructure and green energy.

India is a country of one point four billion people, but it really lacks infrastructure, whether it is raw sports, airports, power. Energy is a huge issue out here. There are so many millions of household which doesn't have access to electricity. So that's how when Gaudamadani decides to step in and help build this infrastructure, his priorities and business interest got aligned well with that of the federal or state governments

The Adani Group is India's biggest importer of coal, it's the largest owner of solar farms, and Nadani owned ports carry almost half the country's shipping containers, while more than ninety million people use their airports each year. And for years, the Adanni Group appear to flourish with infrastructure projects like these. Galtum is currently Asia's second richest man and one of the most influential business leaders in the world. He's worth

So, just to give the high level understanding of who Hindenburg Research is.

In a daring short selling attack, a New York based group called Hindenburg Research accused the Adani Group of the largest khan in corporate history.

It did disclose a short position in a Dani Group and what it's saying basically is that the conglomerate engaged in market manipulation and then accounting fraud as well. Now Gudamadani has denied this and he says that the report is baseless.

Hindenburg alleged that the Adani Group had used a web of companies in tax havens to inflate its revenue and manipulate stock prices. Critics have raised similar questions about the conglomerate for years. The group denied all claims and noted to Bloomberg that they provided a very long and comprehensive response in just seventy two hours on every single point. But the crisis came at a very tense moment for the Adnni Group.

This came at a time when the group was looking at one of the biggest share sales in its history. That share sale had to be pulled. The group lost a lot in market cap.

How much market cap did they lose one.

Hundred and fifty billion dollars in a few months?

Wow?

Huge.

It took them six months to a year to asswitch all these concerns and regain that market cap.

The Adanni Group has also faced regulatory probes at home and in the US, where prosecutors were investigating whether an ADNNI entity, executives linked to the company, or billionaire founder Galtum himself had paid bribes to Indian officials in return for favorable treatment on a green energy project. Group said none of its units has been notified of the probe and that it's not aware of its chairman being part

So they're cutting down on leverage in a big way. They're putting a load of risk mitigation measures in place. They're more measured in their approach towards growth and above ald, they're communicating more.

And now Anto says he's seen a huge change in how the company is trying to be more transparent about their operations.

Till the Hiddenburg reports hit, many considered it as an opaque group. Many knew nothing about the group or its inner workings, the kind of processes they have and so on. Now they are very aggressive about communicating, whether it's to the investors or media.

And this newfound openness of the Adanni family to the media may have also helped Bloomberg get rare access to the tycoon and his family. Anto and a TV crew spent nearly a dozen days following leaders of the Adanni group, and while Gotham Madonni declined to address controversies swirling around his conglomerate, he did agree to talk about the family conversations around succession.

Succession is not in one of the events, but it is a long drawn journey and my plan of succession started almost decade ago.

After the break what the Adanni family plans might mean for India and the rest of the world. Bloomberg's Anto Anthony was given unprecedented access to the Dani family. He and a TV crew spent nearly two weeks in India, visiting the headquarters and meeting employees.

Right from the janitor right up to group CEOs.

And taking field trips to visit their sites.

We went to a place called Kavda in Gujarat, which is a very arid region. It said does at ball. So what they're trying to do is they're trying to cover up the area five times the size of Paris with solar panels and win turbines.

One thing Anto wanted to talk with Galta Madani about was why he was planning for succession now when he's still very much engaged in the business. Galtum told him he and his brothers want to be around to help the next generation.

So watch Gautamadani and his two brothers, who are involved in the business is trying to do is transition it into the next generation at a time when they are still around to oversee and correct them when needed. This is a conglomerate which runs from selling apples to running airports. It's a complex set of businesses spread across various sectors. So the complexity of this transition is probably the reason why he's thinking of it right now.

And when is he planning to hand over the reins.

He's sisty two right now. When he's seventy is when the transition happens. That's when he will retire. Godabadana is looking at handing over his empire to four successors.

These four successors are Gautum's sons Karen and Jet and their cousins Pranav and Sagar. The businesses have been split between the four younger Adanis, with each heading their own units. But when it comes to the decisions that affect the entire group, the four have agreed to make the call together. And so how is this going to work in reality? Because you've essentially got four heirs. I mean, who calls a shot if there's a disagreement.

So they're very clear that there is not going to be a first among the equals. All four will have equals, say in management. So now if you are to take a major strategy decision, then all four has to be on board. It is going to be a joint decision making.

That sounds too good to be true.

That is what everybody is telling me. Most of the succession experts I talked to made that point. Some of them even said that you have to work against basic instincts of human beings to make this work because at some point meritocracy will come up, some people will be more committed to the businesses and will build their businesses up in a better way.

And so did press Prana the eldest Air on how realistic this new joint management structure actually is.

Transition plans at various large conglomerates had failed due to internal fissures within the next generation. What plans the group is putting in place to make sure that that doesn't happen.

I don't know if you're aware, but we as a family, we have lunch every day together. Chairman, my uncle, my father wins in when he is there, and the whole second generation we all actually have lunch together. We discuss issues,

Company, and when it comes to Galtum's personal fortunes, some one hundred billion dollars of it, Anto sources told them it would also be split equally among the four.

All this is held through a trust, the family trust, and areas down the line, when Godomadani turns seventy, each of the second generation will be and equal beneficiary of that trust. If we were doing it today, each of them could have got about twenty five billion dollars. But then we have to keep in mind the meteoric rise in wealth of the group. So seven years down the line, it is anybody's guess what they will.

Be inherited center billionaires for sure, and Anto says this humongous wealth transfer and leadership transition doesn't just concern this single family. There's far reaching ramifications for India's three point five trillion dollar economy and its future development. One reason for that is that the Idani Group has played such a key role in helping India shore up its infrastructure.

There's a lot of deficiencies in the infrastructure, so Adani is somebody who has come up and has been trying to plug that gap. We haven't seen anybody trying to do it at this scale ever in independent indias history. So his success is very important because if he succeeds, then India will be able to grow at a faster pace.

And what about galtem If this all goes well.

Once the transition is complete and once you have more time at hand, what would be your plans?

Oh, ultimately we will retire and be more relaxed.

This is The Big Take Asia from Bloomberg News. I'm wanha. This episode was produced by Young Young Naomi m Jessica Beck and Alex Sugia, who also mixed it. It was fact checked by Naomi and edited by Caitlin Kenney and Alyssa McDonald. Our senior producers are Nami Shaven and Kim Gettelson. Our senior editor is Elizabeth Ponso. Nicole Beemster Bower is our executive producer, and Sage Bauman is Bloomberg's head of Podcasts. Please follow and review The Big Take Asia wherever you