Sebi had asked the two Mauritius-based Elara funds, including India Opportunities Fund and Vespera Fund, to provide “granular disclosures” of all their shareholders
Securities and Exchange Board of India (Sebi) has warned two Mauritius-based funds with investments in the billionaire Gautam Adani-led Adani Group that they are likely to face penalties and cancellation of licenses for not giving their shareholding details. The market regulator in the past two years has asked for the information multiple times, Reuters reported.
Although the funds in question are Mauritius-based, they are registered with Sebi as foreign portfolio investors (FPIs) and hence, they fall under the regulatory ambit.
Since the American short seller Hindenburg Research published its first report in January 2023, Sebi has asked the two Mauritius-based Elara funds, including India Opportunities Fund and Vespera Fund to provide “granular disclosures” of all their shareholders.
“To date, this has not been provided by these FPIs (foreign portfolio investors) to Sebi... They have also not provided any reasons,” the document reviewed by Reuters mentioned. Sebi in its documents stated that the delays in sharing the information had “impeded the investigation into the Adani Group’s compliance with minimum public shareholding norms.”
Elara funds reportedly did not disclose their acquisitions of certain Adani stocks exceeding 5%.
The two funds have urged Sebi to settle the matter without admitting guilt and by paying a monetary penalty, Reuters reported, citing sources.
Sebi has been investigating the power-to-port conglomerate and its 13 offshore investors since alleging financial misconduct. Adani Group, however, refuted such accusations. The group’s name again surfaced when the US authorities issued an indictment order against power-to-port conglomerate chairman Gautam Adani, his nephew Sagar Adani and some other senior executives. The US authorities accused them of paying bribes to secure Indian power supply contracts and allegedly misleading US investors during fundraising.
According to Sebi’s regulations, at least 25% of the shares of listed firms should be held by public shareholders. However, the American short seller in its report accused some offshore funds with the Adani Group of violating the shareholding rules.