New Delhi: Entities linked to the Adani Group have approached the Securities and Exchange Board of India (SEBI) to settle allegations of violating public shareholding norms in four of its listed companies, according to a Business Standard report. The companies involved include Adani Enterprises, Adani Power, Adani Energy Solutions and Adani Ports and Special Economic Zone.
One of the applicants, Emerging India Focus Funds (EIFF), a Mauritius-based foreign portfolio investor allegedly linked to Vinod Adani, elder half-brother of Adani Group chairman Gautam Adani, has offered a settlement of Rs 28 lakh, according an Economic Times report. Adani Enterprises director Vinay Prakash and Ameet Desai, director of Ambuja Cements, have each proposed settlements of Rs 3 lakh, the report says. Adani Enterprises itself has also submitted a settlement application.
These applications come in response to a SEBI show-cause notice issued on September 27. While settlement filings do not confirm guilt, they are often used as procedural measures to ensure compliance with regulatory requirements.
SEBI has not yet ruled on the settlement proposals. While at least four Adani-linked entities have applied, it is believed that more involved parties may follow suit. According to SEBI regulations, settlement applications must be filed within 60 days of receiving a show-cause notice to remain valid.
The show-cause notices target 26 entities, including Gautam Adani, his brothers Vinod, Rajesh and Vasant, nephew Pranav Adani and brother-in-law Pranav Vora. SEBI has alleged that these entities engaged in complex shareholding arrangements to bypass public shareholding norms.
The notices claim that Vinod Adani and his affiliates generated over Rs 2,500 crore through such arrangements, allowing them to manipulate compliance with public shareholding requirements in the group’s companies.
SEBI’s investigation, initiated in October 2020, scrutinised transactions between 2012 and 2020. It uncovered connections between Vinod Adani and two foreign portfolio investors – EIFF and EM Resurgent Fund – along with Opal Investments. These entities reportedly acquired shares during public offerings and institutional placements to help the Adani Group meet regulatory thresholds.
Despite their alignment with Adani promoters on key resolutions, such as related-party transactions and director appointments, the holdings of foreign portfolio investors were classified as “public” rather than “promoter group” shares, according to SEBI.
The Adani Group has denied any wrongdoing, asserting that the settlement applications are precautionary. A group spokesperson noted to the Economic Times that responses contesting SEBI’s allegations had been filed alongside the settlement applications.
Also read: How Government Policies and SECI Have Favoured the Adani Group
SEBI launched its inquiry following complaints in mid-2020 about alleged non-compliance with the mandatory 25% public shareholding requirement for listed companies. The regulator has sought to recover Rs 1,984 crore from nine parties, including Vinod Adani, and Rs 601 crore from five others.
The Adani Group also faces allegations in the United States of bribery to secure Indian power contracts. Gautam Adani failed to inform SEBI of the US investigation and a Federal Bureau of Investigation raid, and lied when he denied they happened.
