Finance Ministry informs Parliament that SEBI and DRI are probing Adani Group firms

Is the Finance Ministry finally beginning to act against Adani firms?

July 19, 2021

Adani firms under SEBI, DRI probe, says Finance Ministry to Parliament

In an interesting development, Finance Ministry on Monday informed Parliament that markets regulator Securities and Exchange Board of India (SEBI) and the Directorate of Revenue Intelligence (DRI) are probing some Adani Group companies for non-compliance with rules related to recent controversies on the huge rise in share prices. Minister of State for Finance Pankaj Chaudhary in a written reply to a question said accounts of three of the six Mauritius-based funds, that have invested most of their money in Adani Group firms, were frozen in 2016 over the issuance of Global Depository Receipt (GDR) by certain listed firms. No freeze was ordered for their holding in other firms.

“SEBI is investigating some Adani Group companies with regard to compliance with SEBI regulations,” he said without giving details. Also, DRI “is investigating certain entities belonging to the Adani Group of Companies under laws administered by it,” he said.

Shares of Adani Total Gas Ltd, Adani Power Ltd, Adani Transmission, Adani Ports & Special Economic Zone, Adani Green Energy, and flagship Adani Enterprises were impacted by the reports.

Shares of port-to-energy group nosedived last month after reports that accounts of three of the six Mauritius-based funds that have invested most of their money in Adani Group firms had been frozen by the national share depository. The three funds owned about USD 6 billion of shares across the conglomerate. The Adani Group on June 14 denied the report of the freeze, calling it “blatantly erroneous”. A day later it clarified that three Demat accounts of Cresta Fund Ltd, Albula Investment Fund Ltd, and APMS Investment Fund were “suspended for debit”, adding to the confusion over the status of the offshore funds.

Shares of Adani Total Gas Ltd, Adani Power Ltd, Adani Transmission, Adani Ports & Special Economic Zone, Adani Green Energy, and flagship Adani Enterprises were impacted by the reports. Prior to the episode, some of Adani Group’s listed stocks had soared more than six folds in value since the start of 2020. Group’s billionaire founder-chairman Gautam Adani had earlier this month blamed “reckless and irresponsible” reporting for the fall. Recently PGurus reported that all the three little-known Mauritius firms that invested Rs.45,000 crore in Adani companies were having the same address[1]

“In a matter pertaining to issuances of GDR by certain Indian listed companies, SEBI vide order dated June 16, 2016, had directed depositories to freeze particular beneficiary accounts of certain FPIs including Albula Investment Fund Ltd, Cresta Fund Ltd, and APMS Investment Fund Ltd,” said Minister.

But no order in respect of other beneficiary accounts of these three FPIs has been passed by SEBI, he said. “Six companies of the Adani Group are listed and traded on recognized stock exchanges in India. The holding of Foreign Portfolio Investors (FPIs) in these companies is based on day-to-day trading of shares and thus dynamic,” he added.[2]

References:

[1] All the three firms that invested Rs.45000 crores in Gautam Adani’s companies have the same address in Mauritius. Who are the owners of these three firms? – Jun 15, 2021, PGurus.com

[2] Adani shares fall up to 5% as SEBI, DRI probe some group companies – Jul 19, 2021, Money Control

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