SEBI Finds 12 Adani Offshore Funds Violating Disclosure And Investment Rules: Report (image-X/gautam_adani)

The Securities and Exchange Board of India (SEBI) has uncovered violations of disclosure rules and breaches of investment limits by 12 offshore funds investing in Adani group companies, according to a Reuters report.

Earlier this year, SEBI reportedly issued notices to offshore investors, outlining the charges and seeking explanations for the disclosure violations and investment limit breaches. The regulator identified that the offshore funds were reporting their investments in Adani group companies at an individual fund level, while SEBI required disclosure of holdings at the offshore fund group level, according to Reuters.

Reportedly, eight of these offshore funds have approached SEBI to settle the charges by paying a penalty without admitting guilt.

This development follows previous scrutiny by SEBI into -party transactions by the Adani Group, where violations were found. SEBI has investigated 13 instances of -party transactions within the Adani Group.

Violations of disclosure rules and investment limits carry potential penalties of up to Rs 1 crore for each violation by each entity, as per Reuters. Such penalties could also result in a ban from the stock markets.

The investigation into Adani Group’s investments and -party transactions gained momentum after a report by US-based short seller Hindenburg Research in January 2023. The report accused the Adani Group of stock manipulation and accounting fraud, prompting the market regulatory authority to launch an extensive investigation into the allegations. The Adani Group denied the allegations.

SEBI’s probe explores various aspects, including foreign portfolio investors’ ownership complexities, concerns about corporate governance such as party transactions, and the roles of auditors in the matter.