As per a Bloomberg report, the Securities and Exchange Board of India (SEBI) has initiated inquiries into several global funds that have invested in Adani Group stocks, prompting them to justify actions regarding improper disclosures and potential market manipulations.
According to the report, SEBI has taken action against two sets of foreign portfolio investors. The first group is accused of shorting Adani stocks after receiving advance notice of an impending short seller report. This move significantly impacted Adani Group's market value, slashing over USD 100 billion following the Hindenburg report's publication in January 2023.
The second set of investors receiving SEBI's show-cause notices are overseas funds allegedly linked to Adani Group founders. These entities faced intense scrutiny in June 2021 for heavily investing their funds into Adani stocks.
SEBI is pressing these funds for explanations, focusing on potential violations of investment rules such as exceeding permissible limits in a specific stock. The Adani conglomerate has consistently denied any connections with these funds. The Bloomberg report indicates SEBI has not responded to inquiries on this matter.
A spokesperson for the Adani Group declined to comment when contacted by ANI.
SEBI is expected to issue final orders following hearings on these cases, a process likely to extend over several months. Bloomberg suggests SEBI's conclusions from these investigations will mark the conclusion of the Hindenburg episode.
Earlier, in January, the Supreme Court stated no further investigations would occur in the Adani-Hindenburg case once SEBI concludes its probe.
SEBI has accused these funds of lapses in maintaining and revealing information about their ultimate beneficial owners, alongside investing excessively in Adani Group listed entities.
The Bloomberg report notes that legal representatives of eight investors from this group, including Albula Investment Fund, Cresta Fund, MGC Fund, Asia Investment Corporation (Mauritius), APMS Investment Fund, Elara India Opportunities Fund, Vespera Fund, and LTS Investment Fund, are contemplating settlements involving fines without admitting wrongdoing.
The SEBI investigation, expanded per the Supreme Court's directive, includes scrutiny for market manipulation after Hindenburg's allegations of the Adani Group artificially inflating stock prices through undisclosed overseas funds—a claim the Adani Group refutes.
Post the apex court's order, Adani's stocks have shown recovery, allowing the group to resume investments and capital-raising activities after the turbulent period following the Hindenburg report.