Adani Group Approaches SEBI To Settle Shareholding Compliance Breach: Report

As per an exclusive report by the Economic Times, entities that are associated with the Adani Group have approached the securities market regulator, Securities and Exchange Board of India (SEBI), to settle allegations of breaching public shareholding norms in four of their listed companies.

Key Allegations and Financial Impact

According to a report by The Economic Times, the alleged violations date back to 2020 and involve claims that certain shareholdings were misclassified.
SEBI had previously issued notices to Adani Enterprises, Adani Power, Adani Ports, and Adani Energy, accusing them of failing to meet the minimum public shareholding requirements mandated for listed entities. The regulator is seeking to recover approximately Rs. 25 billion (around $295 million) as part of the enforcement of these norms as mentioned in the ET report.

The notices, issued in September 2023, also flagged issues with the categorization of certain shareholdings within these companies, raising concerns about transparency and compliance. Sebi has also issued show-cause notices to 26 other entities that are linked to the Adani Group, including major executives of the organization, ET said.

The economic times report further disclosed that the show-cause notices were also directed to Malay Mahadevia, a childhood friend of Gautam Adani and director at Adani Wilmar; Vneet Jaain, managing director of Adani Green Energy; and Dharmesh Parikh, the auditor for several Adani Group entities. According to SEBI's notice, Gautam Adani, along with Prakash, Desai, Mahadevia, Jaain, and nine other directors of Adani Group companies, have been charged with failing to comply with the required public shareholding norms for the firms where they hold board positions.

Settlement Proposals By Adani Group

In response to the notices, Adani Enterprises and some of its associated entities have submitted settlement proposals to SEBI, as ET reported.
Adani Enterprises and its director Vinay Prakash, along with Ambuja Cements director Ameet Desai, have sought to resolve the matter through a settlement amounting to 3 lac each.

Additionally, Emerging India Focus Funds (EIFF), a Mauritius-based foreign portfolio investor linked to Vinod Adani, brother of Adani Group Chairman Gautam Adani, has offered a separate settlement of Rs. 28 lac.
The settlement applications are reportedly precautionary measures, contesting the allegations while seeking a resolution to avoid prolonged litigation.

Adani Group Shares Today

Adani Group stocks took center stage in Tuesday's trading session, with mixed performances across the conglomerate's companies. By 3:00 PM, Adani Enterprises shares had gained 2.5%, trading at Rs.2,512, while Adani Ports led the rally with a strong 6.2% increase, reaching Rs.1,291.50. The surge in Adani Ports' stock comes as the company reported handling 36 million metric tonnes (MMT) of cargo in November 2024. Other group companies also joined the upward trend. ACC and Ambuja Cements recorded gains of 2.9% and 5.6%, respectively. However, not all stocks in the group followed the trend. Adani Green Energy and Adani Power registered slight declines of 0.6% and 0.4%, respectively.

The Adani Group has been under intense scrutiny since last month when U.S. authorities accused Gautam Adani and several top executives of involvement in a scheme to pay $265 million in bribes to secure Indian power supply contracts. The allegations also included misleading U.S. investors during fundraising activities. Despite these claims, which have created significant ripples in the market, the Adani Group has vehemently denied the accusations, labeling them as baseless and unsubstantiated.