Entities associated with the Adani Group have approached the Securities and Exchange Board of India (Sebi) to settle allegations of violating public shareholding norms. The settlement applications were filed in response to a show-cause notice from Sebi, which has been investigating the matter since 2020. The allegations involve prominent individuals, including Vinod Adani, and four listed Adani Group companies—Adani Enterprises, Adani Power, Adani Ports, and Adani Energy Solutions.
Entities linked to the Adani Group, including foreign portfolio investor Emerging India Focus Funds (EIFF), have reportedly approached the Securities and Exchange Board of India (Sebi) to settle allegations of breaching public shareholding norms in four listed Adani companies. These companies include Adani Enterprises, Adani Power, Adani Ports and Special Economic Zone, and Adani Energy Solutions.
Proposed Settlement Offers
EIFF, a Mauritius-based FPI allegedly tied to Vinod Adani, Gautam Adani’s elder half-brother, has proposed a settlement of Rs 28 lakh, according to The Economic Times. Additionally, Vinay Prakash, a director at Adani Enterprises, and Ameet Desai, a director at Ambuja Cements, have each offered Rs 3 lakh as settlement. Adani Enterprises has also filed a settlement application.
These applications follow a Sebi show-cause notice issued on September 27. Filing for settlement allows entities to resolve regulatory disputes without admitting guilt but requires action within 60 days of receiving a notice. Sebi has yet to decide on the settlement requests.
Allegations Against Adani Entities
The allegations involve 26 entities, including Adani family members and affiliates, for allegedly circumventing public shareholding rules. Sebi has claimed that Vinod Adani and his affiliates used complex shareholding structures to accrue over Rs 2,500 crore, bypassing the mandatory 25 per cent public shareholding rule.
Sebi’s investigation, which began in October 2020 and examined transactions from 2012 to 2020, identified patterns linking Vinod Adani to three FPIs – EIFF, EM Resurgent Fund (EMR), and Opal Investments. These FPIs allegedly acquired shares during public offerings, enabling the Adani Group to appear compliant with public shareholding norms.
For instance, shares of Adani Enterprises were obtained during its offer-for-sale (OFS), and shares of Adani Ports were acquired through its institutional placement programme (IPP). These transactions reportedly boosted public shareholding in both companies from below 25 per cent to the regulatory threshold, but Sebi contends that these FPIs were acting under the influence of Adani promoters.
Adani Group’s Response
The Adani Group has denied any wrongdoing, describing the settlement applications as precautionary measures. A source close to the group said the applications ensure procedural compliance without admitting guilt. “We have filed responses to contest the allegations and have also requested access to Sebi’s evidence,” the person said.
The Adani Group also stated that its entities have adhered to regulatory norms and that the FPIs in question acted independently.