New Delhi: The Securities and Exchange Board of India (SEBI) has found that 12 offshore funds investing in Adani group companies were violating disclosure rules and in breach of investment limits, Reuters has reported.
Reuters quoted sources as saying that earlier this year, SEBI had “sent notices to a dozen Adani group’s offshore investors outlining the charges and asking them to explain their positions on the disclosure violations and breach of investment limits”.
“The offshore funds were reporting their investment in Adani group companies at individual fund level. Regulator wanted the disclosure of holding at offshore fund group level,” one of the sources told Reuters. Eight of these offshore funds have approached SEBI to settle the charges by paying a penalty without admission of guilt, the agency’s report stated.
In August 2023, Reuters had reported, that SEBI had found violations in disclosing certain related-party transactions by the Adani Group. SEBI has probed 13 instances of related-party transactions in the Adani matter.
Violations could result in penalties of up to Rs 1 crore for each violation by each entity. Furthermore, the potential imposition of these penalties could also lead to a ban from the stock markets, Reuters said.
On January 24, 2023, US-based short seller Hindenburg Research released a report, accusing the Adani Group of stock manipulation and accounting fraud. Since then, SEBI has been meant to spearhead an investigation into crucial facets of the allegations.
As The Wire has reported, SEBI’s probe delves into the complexities surrounding foreign portfolio investors’ ownership, concerns related to corporate governance, such as related party transactions, and auditors’ roles.
