SEBI probing Adani group firms over regulatory compliance

Minister of state (MoS) for finance Pankaj Chaudhary, in reply to a question by Trinamool Congress MP Mahua Moitra, said in Parliament today that the directorate of revenue intelligence and SEBI (Securities and Exchange Board of India) are probing some entities of the Adani group about compliance with the SEBI regulations.

TMC MP Moitra had asked the ministry to provide details of "ultimate beneficial ownership of FPIs" owning a stake in Adani group companies. She had also asked if FPIs or Adani entities were under probe by SEBI, IT, ED, DRI, MCA for suspicious transactions.

"Whether it is a fact that three funds namely, Albula Investment Fund, Cresta Fund and APMS Investment Fund, are in the SEBI frozen list of May and 15th June, but a clarification is issued by NSDL that these accounts are not frozen in the case of Adani companies, the government replied in affirmative," the junior minister said.

He added: "In a matter pertaining to issuances of global depository receipt (GDR) by certain Indian listed companies, SEBI vide Order dated June 16, 2016, had directed depositories to freeze particular beneficiary accounts of certain FPIs, including Albula Investment Fund Ltd, Cresta Fund Ltd, and APMS Investment Fund Ltd."

Refusing to provide details about proceedings by the Income Tax department, MoS finance Pankaj Choudhary said as far as an investigation under Income Tax Act, 1961, is concerned, the disclosure of information regarding specific taxpayer is prohibited, except as provided under Section 138 of Act.

The minister said Adani's six companies are listed and traded on recognised stock exchanges in India. The holding of FPIs in these companies is based on day to day trading of shares and thus dynamic, he added.

The minister said the enforcement directorate is not probing these companies holding FPIs (foreign portfolio investment) based on day to day trading of shares. Adani Group has six listed companies, including Adani Enterprises, Adani Transmission, Adani Total Gas, Adani Green, Adani Ports and Adani Power.

Responding to reports, Adani group said the company has always been transparent with all its regulators and has full faith in them. "While we have always been fully compliant with applicable SEBI regulations, we have made full disclosure to SEBI on specific information requests from them in the past. However, we have not received any communication or information requests recently," it added.

"With regard to DRI matter, it issued a show cause notice to Adani Power, about 5 years back. Subsequently, DRI passed an order in favour of Adani Power confirming that there is no over-valuation of equipment. The department has approached the Tribunal and the matter stands sub judice now. Adani Group is a responsible corporate citizen and strongly believes in compliance of applicable laws and adheres to prudent corporate governance framework," an Adani group spokesperson said.

The latest reports led to the Adani group stocks falling by up to 3.83 per cent. Adani Power stock is trading 3.83 per cent or Rs 4.05 down at Rs 101.60. Adani Port is down 2.47 per cent or Rs 16.95 at Rs 670.65. Adani Green stock has dwindled 3.24 per cent to Rs 976. Adani Enterprises stock is down 1.74 per cent or 24.35 to Rs 1,371.15 on the National Stock Exchange (NSE).

Last month, Adani group companies were caught up in controversies after reports emerged of the National Securities Depository Ltd (NSDL) freezing accounts of three foreign funds -- Albula Investment Fund, Cresta Fund and APMS Investment Fund -- holding shares in Adani Group companies. The Adani group had later termed these reports "blatantly erroneous".

Also read: NSDL freezes three FPI accounts owning Adani Group shares worth Rs 43,500 crore

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