The Congress on Sunday continued to train its guns on the Securities and Exchange Board of India (SEBI) for the prolonged delay in completing its investigation into “the Adani group’s brazen attempt” to bypass regulations, demanding answers from the regulator.
The comments, made by Congress general secretary in-charge communication Jairam Ramesh on X, come in response to two petitions filed by Mauritius-based foreign portfolio investors (FPIs) allegedly linked to the Adani Group, as highlighted in Hindenburg Research’s January 2023 report.
According to a counsel with direct knowledge of the matter, the petitioners, Lotus Global Investment and LTS Investment Fund, have approached the Securities Appellate Tribunal (SAT) seeking urgent exemptions from additional disclosure requirements and an extension to comply with SEBI’s FPI concentration norms ahead of the September 9 deadline.
The funds argued that Sebi’s additional conditions, which do not apply to other participants operating under the same FPI framework, are prejudicial and place their investors at a disadvantage, the counsel said.
Last year, Sebi had introduced a disclosure regime for FPIs to prevent FPIs from circumventing minimum public shareholding norms. FPIs holding more than 50% of their equity AUM in a single corporate group were asked to disclose granular details of all entities holding any ownership, economic interest, or exercising control in the FPI.
FPIs that failed to disclose ownership details were instructed to liquidate holdings exceeding the specified threshold by September 9.
The two funds filed their pleas on August 20, according to information on the SAT’s website. The next hearing is expected to take place on Tuesday, according to another legal source.
“These are the very same FPIs who stand accused of participating in the Adani group’s brazen attempt to bypass Sebi’s regulations and amass benami (anonymous) stakes in its own companies,” the Congress leader said.
He also pointed out that these firms had benefited from Sebi’s removal of the requirement to identify the “ultimate beneficial owner” of offshore funds, a decision that it was forced under public pressure to reverse in June 2023 in a “tacit admission of its guilt.”
“The basic fact is that a Sebi investigation into these violations that was supposed to be completed in two months and shared with the Supreme Court is still languishing 18 months later,” Ramesh said. “Sebi has a lot to explain, quite apart from the multiple conflicts of interest of its Chairperson that are now unravelling.”
Ramesh’s remarks add to the string of allegations and questions raised by the Congress party soon after Hindenburg Research launched a fresh broadside against Sebi chief, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.