Adani-Linked Companies Seek To Settle Shareholding Violations

Amid allegations of breaching public shareholding norms via unfair trade practices, several entities of Adani Group have approached the Securities and Exchange Board of India (Sebi) to put a lid towards a settlement.

The market regulator believes that Mauritius-based foreign portfolio investor (FPI) Emerging India Focus Funds (EIFF) is linked to Vinod Adani, who proposed to settle the dispute by paying ₹28 lakh, ET reported.

Adani Enterprises (AEL) director Vinay Prakash and Ambuja Cements director Ameet Desai offered to settle the claims for ₹3 lakh.

The market regulator has named four listed companies in the settlement charges, which includes Adani Enterprises, Adani Power, Adani Ports and Special Economic Zone, and Adani Energy Solutions (formerly Adani Transmission).

In addition to this, show cause notice has also been served to Gautam Adani's childhood friend and Adani Wilmar director Malay Mahadevia; Adani Green Energy managing director Vneet Jaain, and Dharmesh Parikh, auditor of several Adani Group companies and the “personal chartered accountant of the promoters,”

Sebi has also named Gautam Adani, Prakash, Desai, Mahadevia, and Jaain, along with nine additional Adani Group directors for not adhering to mandatory public shareholding norms.

Notably, the settlement proposals that were made in advance were in response to a show cause notice issued by the Sebi on September 27. However, settlement applications neither accept nor deny the claim.

As per a source, “Sebi is yet to take a view on the settlement applications.”

A person from a company said, “Filing a settlement application is the normal course of process for any corporate that has been served a show cause notice because if you don't file within 60 days, you forfeit your right for settlement.”

He added, “Group entities have also separately filed a response to the show cause notice, contesting the charges and requesting inspection of the documents on which the charges are based. The settlement application is only a precautionary measure by way of abundant caution. This is without admitting or denying the charges and to buy peace.”

Previously, Sebi received complaints pertaining to non-adherence of minimum public shareholding requirements by Adani group of companies.

As per the rules, listed companies are mandated to maintain a minimum public shareholding at 25%. This is done to ensure ample liquidity is there in the share markets.

Preceding the offer-for-sale (OFS) and institutional placement programme (IPP), public shareholding in Adani Enterprises and Adani Ports was at 20% and 23%, respectively. However, the share of public shareholding in the two companies increased to 25%.