Adani Group approached SEBI for shelter, four companies are facing serious allegations

Gautam Adani News: The troubles of Adani Group are not taking the name of decreasing. The matter of US allegations had not even cooled down that now the Securities and Exchange Board of India (SEBI) has started action against several listed companies of Adani Group for violating public shareholding rules.

Settlement offer

Four major listed companies of Adani Group are accused of violating the rules. Mauritius-based FPI Emerging India Focus Funds (EIFF), which is allegedly linked to Gautam Adani's brother Vinod Adani, has proposed a settlement amount of Rs 28 lakh. Apart from this, Adani Enterprises director Vinay Prakash and Ambuja Cements director Amit Desai have offered Rs 3 lakh.

The allegations have neither been accepted nor denied in the settlement application. This step has been taken in response to the show cause notice issued by SEBI on September 27.

SEBI notice and Adani Group's response

SEBI has issued notices to four listed companies of Adani Group -

Adani Enterprises

Adani Power

Adani Ports and Special Economic Zone

Adani Energy Solutions

These companies are accused of misclassifying promoter shareholding as public shareholding. The group has filed a settlement application as a legal process opposing these allegations.

Many directors and close ones under scrutiny

Apart from the key officials of Adani Group, SEBI's notice also includes Gautam Adani's childhood friend Malay Mahadevia and Adani Green Energy MD Vineet Jain. Also, notice has been issued to the promoters' personal chartered accountant Dharmesh Parikh.

Background of the case

The dispute started in June-July 2020, when SEBI received complaints of violation of minimum public shareholding (25%) rules by Adani Group companies. Subsequently, SEBI initiated a formal investigation on October 23, 2020.

The investigation found that Mauritius-based EIFF, EM Resurgent Fund (EMR), and a foreign investor Opal Investments allegedly violated public shareholding rules in collusion with Adani Group promoter companies.

Transactions under investigation

These investors acquired shares in Adani companies through the following methods:

Adani Enterprises: Through Offer-for-Sale (OFS).

Adani Ports: Through Institutional Placement Program (IPP).

Adani Power: Through merger.

Public shareholding of Adani Enterprises and Adani Ports increased to 25% after OFS and IPP, which included the stake of Mauritius-based FPI.

SEBI's allegation and recovery demand

SEBI has accused these four companies of making profits of more than Rs 2,500 crore in violation of public shareholding rules. The regulator has sought recovery of these profits and has hinted at possible securities market prohibition action against the group's promoters.

Adani Group's future strategy

Adani Group has defended itself under the legal process by filing a settlement application. The group has requested SEBI to review the documents used for the investigation.

Conclusion

The ongoing allegations and legal actions against the Adani Group are a major challenge for the Indian corporate sector. This case is not only affecting the reputation of the group, but is also highlighting the strictness and transparency of Indian market regulatory bodies. SEBI's action and the group's response in the coming days will determine the direction in which this dispute will go.