India Cracks Down On Adani-Linked Funds Over Transparency Failures

Photo: Adani Group

India-West News Desk

MUMBAI – India’s markets regulator has warned two Mauritius-based funds with holdings in the Adani Group that they could face penalties and cancellation of licenses for failing to disclose shareholder details despite repeated requests over two years, Reuters reported.

The Securities and Exchange Board of India (SEBI) has been investigating the Adani Group and 13 offshore investors since U.S.-based Hindenburg Research alleged in 2023 that the conglomerate improperly used tax havens, sparking a steep sell-off in Adani stocks. The group has consistently denied any wrongdoing, and its share prices have since recovered.

According to a SEBI document dated March 28, the two funds—Elara India Opportunities Fund and Vespera Fund—were asked repeatedly since 2023 to provide “granular disclosures” of all their shareholders. The funds reportedly had “concentrated positions” in Adani companies, Reuters said.

Indian rules mandate that at least 25% of listed company shares must be held by public shareholders. Hindenburg had accused the Adani Group of violating this rule by allegedly using related offshore entities to hold shares, thereby reducing genuine public ownership.

Though Elara and Vespera are based in Mauritius, they are registered with SEBI as Foreign Portfolio Investors (FPIs), making them subject to the regulator’s compliance requirements. Both funds have reportedly sought to settle the case with SEBI by paying a monetary penalty without admitting guilt, Reuters noted.

At least two other offshore investors—Mauritius-based Lotus Investment and LTS Investment—also failed to provide requested information on their Adani holdings, Reuters reported.

Separately, U.S. authorities have indicted Adani Group chairman Gautam Adani and several executives, alleging they paid bribes to secure Indian power contracts and misled American investors during fundraising efforts. The group has denied the charges, calling them baseless.