Mumbai: The Securities and Exchange Board of India (SEBI)–India’s stock market regulator—has found that offshore funds to Adani group companies have violated disclosure regulations and exceeded investment limits.
A foreign news agency had August last year reported that the SEBI had stumbled up on the regulatory breach in disclosures by the listed companies and restriction on offshore fund holdings. The violations in regulatory norms by the offshore funds were detected in course of SEBI’s probe in to the allegations that one of the funds linked to the Adani Group had a close links with the conglomerate’s primary shareholders. However, the Adani Group had denied the charges.
Early this year, the SEBI had issued notices to twelve offshore investors related to the Adani group, and asked them to offer detailed clarifications with regard to the allegations. The offshore funds were also told to clarify their positions with regard to violations of disclosure requirements and investment limits.
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Quoting the news agency, a market analyst said that the offshore funding houses were reporting to their investments in Adani group of companies at individual fund level. The SEBI wanted the disclosure of holding at the offshore fund group level. It has been reported by the SEBI that eight offshore funds submitted a written request to the regulator to resolve the issues for which they were ready to pay the penalty without admitting their faults.
It was earlier found that 13 foreign portfolio investors (FPI) identified by SEBI refrained from divulging the information about the ultimate beneficial owners in the listed Adani entities. On the other hand, eight funds were seeking to resolve the security breach issue with the markets regulator.
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A financial news paper reported that the legal teams, representing Albula Investment Fund, Cresta Fund, MGC Fund, Asia Investment Corporation (Mauritius), APMS Investment Fund, Elara India Opportunities Fund, Vespera Fund, and LTS Investment Fund have collectively submitted 16 settlement applications to SEBI.
The market regulator also scrutinised role of 13 Foreign Portfolio Investors (FPIs) for regulatory violations. Besides the eight above mentioned funds, five additional entities—Emerging India Focus Funds, EM Resurgent Fund, Polus Global Fund, New Leaina Investments, and Opal Investments were examined for investment in the Adani group of companies. Officials said that the SEBI inquiry hit a roadblock owing to challenges in identifying the ultimate beneficial owners of these FPIs and their potential ties to the Adani Group.
