Adani Group in Trouble With SEBI: The Market Regulator Finds Multiple Violations

The WatchDog of the Indian Stock Market, Securities and Exchange Board of India(SEBI) has found a Dozen offshore investors that had their funds invested in the Adani Group Companies violated disclosure rules and adding to this were also in breach of the investment limits as reported.

What are Offshore Investments

Offshore investment is the type of investment that includes keeping money in a jurisdiction other than one’s country of residence. It can be referred to as different investment strategies which capitalise on benefits offered outside of an Investor’s home country. Advantages include Tax benefits, asset protection and privacy. Disadvantages include regulatory scrutiny on a large global scale and also high costs which are associated with maintaining offshore accounts.

What Has Been Reported?

India’s Market Regulator, SEBI has discovered that Twelve offshore funds, which had invested their funds in The Adani Group, have exceeded the investing limits and violated the disclosure regulations as stated by reports, Last year in August, it was disclosed that SEBI had discovered certain breaches of regulations concerned with disclosures by listed companies.

According to Reports, The regulator may suspect that some of the Foreign investors having their funds invested in the Adani Group may not be genuine shareholders, but they might be acting as proxies for Adani Group promoters. There can also be a case of the investors who have invested their funds in Adani Groups not presenting their holdings accurately.

A report also states that legal representatives of 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.

Before, it was reported that out of the 13 foreign portfolio investors (FPI) that are being identified by SEBI for their failure in revealing information concerning their ultimate beneficial owners in the listed  Adani Group entities, 8 of them are seeking resolution with the markets regulator regarding securities violation issues and have sought to settle charges through Penalties without the Admission of Guilt.

Conclusion: The report states that the Regulator, SEBI has found violations from offshore investors of the Adani Group but any statement from The group and the regulatory body has not yet been made. The stocks of Adani Group are trading in the range of +0.5% to +1.5% today.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.