SEBI rejects settlement bids by overseas funds in Adani Group probe

The Securities and Exchange Board of India (SEBI) has reportedly rejected settlement applications filed by several overseas funds holding stakes in Adani Group companies, after the proposals allegedly failed to meet the regulator’s requirements.According to a report by The Economic Times, SEBI informed representatives of the funds about the rejection last week. As many as 13 overseas portfolio investors had approached the regulator to settle an investigation dating back to 2020. The probe examined whether the funds were genuine public shareholders of listed Adani companies or were allegedly acting on behalf of the group's founders. Adani Group Proposes ₹16,000 Crore Titanium Plant In Andhra Pradesh's Srikakulam Overseas funds face scrutinyThe funds reportedly under scrutiny include Albula Investment Fund, Cresta Fund, Asia Investment Corporation (Mauritius), APMS Investment Fund, Elara India Opportunities Fund, Vespera Fund and LTS Investment Fund. Several of these investors had previously held substantial positions in Adani Group companies, although their holdings have since declined.Some funds were reportedly unwilling to provide information sought by SEBI, while others objected to demands involving the disgorgement of funds as part of a potential settlement. The report has not been independently verified.The regulator's action adds another development to a long-running investigation involving offshore investors in Adani companies.Adani Group ownership controversyThe issue gained wider attention after Hindenburg Research referred to SEBI's investigation in its 2023 report on the Adani Group. The US-based short seller had alleged corporate and governance-related irregularities, claims that the conglomerate has repeatedly rejected. SEBI had also sought responses from certain global funds in 2024 over potential breaches of disclosure requirements.The overseas investors had attracted regulatory attention in 2021 after disclosures showed that some funds had invested almost their entire portfolios in Adani Group stocks. Questions were subsequently raised about whether the funds met requirements governing genuine public shareholding.The Adani Group has denied having any connection with the funds under scrutiny. The latest SEBI action could prolong the regulatory proceedings as the parties continue to address the unresolved issues.

13 overseas portfolio investors sought to resolve a 2020 investigation into their status as genuine public shareholders or agents for Adani Group founders