SEBI probing Adani Group’s ties with Gulf Asia fund: Report

The Securities and Exchange Board of India is probing the ties between India's ports-to-power conglomerate Adani Group and Gulf Asia Trade & Investment, a fund that is incorporated in the British Virgin Islands, news agency Reuters reported on October 11, citing sources who are privy to the development.

The investigation has been launched to ascertain whether any share ownership rules were flouted, the report claimed, based on the inputs it received from two persons who are aware of the matter.

The Gulf Asia fund, the report said, is owned by Dubai-based businessman Nasser Ali Shaban Ali as per the checks on its website last month. The website has since been pulled down, it added.

As per the data shared by the Organised Crime and Corruption Reporting Project (OCCRP) with Reuters, the fund has invested in several listed Adani entities.

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The latest probe, as per the report, is part of the Indian market regulator's investigation into the Gautam Adani-led conglomerate, which was accused of accountancy fraud and stocks manipulation, in a damning report released by short-seller Hindenburg Research in January. The report had alleged that offshore shell firms "surreptitiously" owned stake in Adani's listed arms, thereby posing governance risks.

The SEBI probing officials could be closely looking at whether the ties between the Gulf Asia fund and Adani Group would be deemed to be acting “in concert” with the conglomerate's shareholders, the sources who spoke to Reuters said.

Adani Group has so far rejected the allegation of opaque funding and accountancy fraud. The company dismissed the charges levelled by OCCRP, and had described the report released by Hindenburg as a “calculated attack on India”.

The OCCRP data, shared with Reuters, shows that Gulf Asia started investing in Adani's listed firms months after SEBI had, in June 2013, directed a total of 105 companies to raise the number of shares held by the public to at least 2 percent of their total floats.

Gulf Asia held shares worth $51.4 million in two Adani entities – the flagship Adani Enterprises and Adani Power – as of April 2014, the report said, citing OCCRP data. 

The shareholding increased to $202 million in four entities – Adani Enterprises, Adani Transmission, Adani Ports and Adani Power, the report added, further stating that Adani Enterprises did not list Gulf Asia as a related party in its annual reports.

Adani Group was yet to issue a statement in response to the Reuters report as the time of publishing this report. The Gulf Asia fund was also yet to react to the news.

In a statement issued in September, days after OCCRP released its startling report that raised questions against the Adani Group, the company had said: “We categorically reject these recycled allegations. These news reports appear to be yet another concerted bid by Soros-funded interests supported by a section of the foreign media to revive the meritless Hindenburg report.”