12 offshore funds investing in Adani Group breached disclosure rules: Sebi

Sebi has issued notices to 12 offshore investors earlier this year associated with the Adani group, seeking clarification on the violations of disclosure requirements and investment limits

India's market regulator, the Securities and Exchange Board of India (Sebi), uncovered that twelve offshore funds investing in Adani Group companies had breached disclosure regulations and exceeded investment limits, as reported by Reuters, citing unnamed sources.

Reuters had first reported that Sebi had discovered breaches of disclosure rules by listed entities and offshore funds exceeding investment limits in August last year.

Furthermore, it was investigating the Adani Group's relationship with one of the funds to determine if there was potential coordination with the conglomerate's primary shareholders, an allegation previously denied by Adani.

Earlier this year, the regulator reportedly issued notices to twelve offshore investors associated with the Adani Group, outlining the allegations and seeking clarification on violations of disclosure requirements and investment limits.

"The offshore funds were reporting their investment in Adani Group companies at the individual fund level. The regulator wanted the disclosure of holdings at the offshore fund group level," Reuters reported, citing a source.

Eight of these offshore funds have requested to settle the charges by paying a penalty without admitting guilt, as per the sources cited by the agency.

Previously, Sebi identified 13 foreign portfolio investors (FPIs) for failing to disclose information about their ultimate beneficial owners in listed Adani entities, with eight seeking resolution with the regulator on securities violation issues.

Legal representatives for Albula Investment Fund, Cresta Fund, MGC Fund, Asia Investment Corporation (Mauritius), APMS Investment Fund, Elara India Opportunities Fund, Vespera Fund, and LTS Investment Fund have collectively submitted 16 settlement applications to Sebi, as reported by The Economic Times.

Sebi targeted a total of 13 Foreign Portfolio Investors (FPIs) for scrutiny, including the initial eight mentioned and five additional entities—Emerging India Focus Funds, EM Resurgent Fund, Polus Global Fund, New Leaina Investments, and Opal Investments.

However, the investigation faced obstacles as Sebi encountered difficulties in identifying the ultimate beneficial owners of these FPIs and their potential connections to the Adani Group.