Adani Group seeks SEBI settlement for shareholding violation charges to avoid regulatory action: Report
- SEBI had sent notices to Adani Enterprises, Adani Power, Adani Ports and Adani Energy, alleging they had wrongfully categorised the shareholding of certain entities
Billionaire Gautam Adani-led group has reportedly approached the capital markets regulator Securities and Exchange Board of India (SEBI), seeking to settle a case in which Adani Group was accused of violating public shareholding regulations. According to an Economic Times (ET) report, SEBI had sent notices to Adani Enterprises, Adani Power, Adani Ports and Adani Energy, alleging they had wrongfully categorised the shareholding of certain entities.
According to the report, the ports-to-power conglomerate's minimum public shareholding requirement violations date back to 2020, and the regulator sought to recover about ₹2,500 crore from the Adani Group entities. ET added that Adani Enterprises and one of its directors, Vinay Prakash, and an Ambuja Cements director, Ameet Desai, have proposed a settlement.
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Adani Group approaches SEBI to seek settlement
Emerging India Focus Funds (EIFF), a Mauritius-based foreign portfolio investor (FPI) that SEBI alleges is linked to Vinod Adani, Gautam Adani's older half-brother, last week proposed a settlement amount of ₹28 lakh, according to documents reviewed by ET.
According to ET, Vinay Prakash, the director of the group's flagship company, Adani Enterprises (AEL), and Ambuja Cements director Ameet Desai (whose role as an AEL director in 2014 is the subject of the present matter) have each offered ₹3 lakh as a settlement amount to the regulator.
Apart from the four entities, the market watchdog issued show cause notices to 26 other entities, including Gautam Adani, his brothers Vinod, Rajesh and Vasant, nephew Pranav (Vinod’s son) and brother-in-law Pranav Vora.
According to the show cause notice, the investigation uncovered a scheme involving two FPIs—EIFF and EM Resurgent Fund (EMR)—and a foreign investor, Opal Investments, whose shareholdings were connected to Adani Group promoters, specifically Vinod Adani. They had acquired shares of the four listed Adani companies to present apparent compliance with public shareholding requirements.
According to ET, the proposals were submitted last week in response to a show-cause notice issued by the SEBI on September 27 to about 30 Adani Group entities. The entities have contested the charges in response to the notice, and the settlement application is only a precautionary measure.
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The investigation revealed Vinod Adani’s influence over the FPIs, including consistent voting in alignment with Adani promoters on key matters such as approving related-party transactions and reappointing directors. Despite this, their holdings were categorised as public, contrary to SEBI's findings that they should have been classified as promoter group shareholdings.
SEBI has yet to decide on the applications. While at least four entities have filed the settlement requests, all involved Adani entities may have applied. The report said the filing for settlement is a standard response to show-cause notices, as not doing so within 60 days forfeits this option.
Last month, US authorities accused Gautam Adani and top management executives in the Adani Group of being part of a scheme to pay bribes of $265 million to secure Indian power supply contracts and of misleading US investors during fund raises there, charges the group has called "baseless".
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