Adani-Hindenburg saga: Sebi issues show-cause notices to FPIs
New Delhi: The stock market regulator has issued show-cause notices to about a dozen foreign investors that owned big chunks of Adani group companies as it seeks to lift the veil on their true ownership, two people aware of the matter said. The notices charge the investors with failing to maintain and disclose information about their ultimate beneficiaries. The Securities and Exchange Board of India’s (Sebi) notices to the foreign portfolio investors (FPIs) follow its investigations after US short-seller Hindenburg Research highlighted them in a damning report released in January.
The report said several of these funds had the bulk of their investment portfolio concentrated in Adani group companies. Following the report, most of these funds either exited or reduced their stakes in Adani group companies. The Adani group has rejected the allegations in the Hindenburg report.
“The notices mostly pertain to beneficial ownership information of the funds, which was in question post-Hindenburg allegations, and the funds are in the process of responding to these notices," one of the two people cited above said on the condition of anonymity. The market regulator last month informed the apex court that most of its investigations in the Adani-Hindenburg matter have concluded and the regulator will not seek additional time for the same. The Supreme Court has reserved its order in the matter.
A show-cause notice is issued by Sebi once its investigation team concludes the probe. The parties are required to respond to the charges mentioned in the notice; after this, the case goes to adjudication in which Sebi passes orders. An email sent to Sebi and Adani group remained unanswered.
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