Sebi asks for ultimate beneficial owners' information in Adani firms

The Securities and Exchange Board of India (Sebi) has written to the custodians of foreign portfolio investors (FPIs) owning shares in six Adani Group firms, seeking information on their ultimate beneficial owners (UBO).

These funds include Albula Investment Fund, Cresta Fund, and APMS Investment Fund.

A bulk of India investments of these firms is concentrated in Adani Ports and Special Economic Zone, Adani Enterprises, Adani Green Energy, Adani Power, Adani Transmission, and Adani Total Gas. Regulatory sources said the capital markets regulator is looking into the holding structure of these foreign-based funds to ensure there is compliance with Sebi regulations.

The regulator is learnt to have directed the custodians to furnish UBO details, both on the basis of ‘control’ and ‘ownership’, said sources, adding that the Sebi communiqué was sent last week. The custodians are directed to provide information in 15 days.

Responding to a Business Standard query, a spokesperson for Adani Group said, “We are not aware of any communication from Sebi to the custodians with regard to the matter. This is pertaining to the relevant FPIs and the regulator should be in a better position to offer the desired clarification."

An email sent to Sebi went unanswered. The FPIs couldn’t be reached for a comment either till the time of going to press. Last week, the government had informed Parliament that the markets regulator and the Directorate of Revenue Intelligence are investigating a few Adani Group firms.

A source said that Sebi first conducts a preliminary enquiry, where it collects information from different sources. Only if it finds non-adherence to norms, violation or misappropriation, does it approach the company in question for adjudicating proceedings.

In a separate matter, the accounts of these three foreign funds were frozen in 2016 over the issuance of global depository receipts by certain listed firms. No freeze was, however, ordered for their holding in other firms, the government had clarified.

The confusion arose because the National Securities Depository (NSDL) website continued to show the three FPIs on the list of ‘frozen accounts’, along with 9,444 other entities, as on May 31.

The NSDL, however, had clarified that the freeze of accounts of these three foreign funds was not related to Adani Group, but to a June 2016 case.

According to the latest shareholding data, Albula Investment Fund holds 1.56 per cent stake in Adani Transmission, 1.96 per cent stake in Adani Enterprises, 1.31 per cent stake in Adani Total Gas, and 1.24 per cent in Adani Green Energy. Among stocks where it has seen a decline in holding, as compared to the March 2021 quarter, include Adani Enterprises (down from 2.14 per cent), Adani Transmission (2.23 per cent), and Adani Total Gas (1.91 per cent).

Cresta Fund held 3.21 per cent stake in Adani Transmission as of June 2021 quarter (down from 3.93 per cent in the March quarter), 1.57 per cent stake in Adani Enterprises (down from 2.98 per cent), and below 1 per cent in Adani Total Gas (down from 1.34 per cent).

According to the latest data, APMS Investment Fund held a 2.7 per cent stake in Adani Total Gas, 2.3 per cent stake in Adani Green Energy, 1.9 per cent stake in Adani Transmission, and 1.7 per cent stake in Adani Enterprises. There is marginal change in its Adani Green and Adani Total Gas holdings since the March quarter.