The markets regulator has threatened two Mauritus-based funds with investments in the Adani group that they could face penalties and cancellation of licences for not sharing shareholding details despite repeated requests over two years, according to a document reviewed by Reuters.
The Adani Group and its 13 offshore investors have been facing an investigation by the Securities and Exchange Board of India (Sebi) since Hindenburg Research in 2023 alleged improper use of tax havens by the group, triggering a stock sell-off. The group has repeatedly denied wrongdoing, and its shares have since recovered.
Indian regulations require that at least 25% of the shares of listed companies be held by public shareholders, but Hindenburg alleged the Adani Group breached those rules since some offshore funds with Adani company holdings were related to the conglomerate.
The two Mauritius-based Elara funds - Elara India Opportunities Fund and Vespera Fund - had been asked since 2023 to provide “granular disclosures” of all their shareholders since they had “concentrated positions” in the Adani Group, according to a Sebi document dated March 28, which was reviewed by Reuters.
“To date, this has not been provided by these FPIs (foreign portfolio investors) to Sebi ... They have also not provided any reasons,” the document said, adding that such delays had “impeded the investigation into the Adani Group’s compliance with minimum public shareholding norms.”
Elara Capital and Sebi did not respond to Reuters queries. The Adani Group also did not respond. Reuters