SEBI queries global FPIs on alleged short selling in Adani stocks with prior information of Hindenburg report
Apr 24, 2024
New Delhi [India] April 24 : According to a Bloomberg report, market regulator SEBI has asked many global funds, who have invested in Adani Group stocks, to defend themselves against allegations of improper disclosures and market manipulations.
According to the Bloomberg report, the market regulator has taken action against two groups of foreign portfolio investors. The first is alleged to have shorted in Adani stocks after getting wind that a short seller report would be published soon.
The short seller in question has sliced off over USD 100 billion in market value for the Adani Group soon after the Hindenburg report was published in January of 2023.
The second group to receive SEBI's show-cause notices are overseas funds, alleged to have links to the Adani Group founders. These also faced intense scrutiny in June 2021 for investing almost all of their corpus in Adani stocks.
SEBI is seeking an explanation from these funds as it looks into possible violations of rules around investing in a particular stock beyond permissible limit, the report said. The conglomerate has repeatedly denied any links to these funds.
The Bloomberg report says SEBI has not responded to their queries regarding this.
When contacted, a spokesperson for the Adani Group did not offer any comment to ANI.
SEBI will issue a final order in these probes, after hearing the funds' explanations and it may take a few months.
Bloomberg says SEBI's findings in these two long-standing probes will draw a line under the Hindenburg episode.
Earlier, the Supreme Court said in January that there would be no more probes in the Adani-Hidenburg case after SEBI closes its investigation.
Market regulator SEBI has accused the funds of failing to maintain and disclose information about their ultimate beneficial owners as well as investing beyond permissible limits in listed entities of Adani Group stocks.
Bloomberg report says the legal representatives of eight investors in this group of investors -- 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 looking to settle the matter by paying fines without admission of guilt.
The SEBI probe was expanded at the behest of the Supreme Court's order to include market manipulation after Hindenburg accused the Adani Group of fraudulently pumping up its stock prices through a web of undisclosed overseas funds. The Adani group has denied Hindenburg's allegations.
The Adani Group's stocks have been on a rollercoaster ride post-Hidenburg report.
However, post the apex court order, Adani's stocks have mostly recovered and the group is back to making investments and raising funds.
