SEBI rejects bids by Adani-linked funds

India’s Securities and Exchange Board (SEBI) has rejected settlement applications filed by 13 overseas investment funds that hold stakes in Adani Group companies. Representatives of these funds were informed last week that their proposals did not satisfy SEBI’s criteria for settlement and were therefore turned down.

The rejections mark the latest development in SEBI’s ongoing scrutiny of foreign portfolio investors associated with Adani Group-listed entities. With settlement now off the table for these applicants, reports indicate that SEBI is expected to continue with formal regulatory and adjudicatory proceedings.

Published lists of the overseas vehicles involved identify several named funds among the 13 applicants. These include Albula Investment Fund, Cresta Fund, Asia Investment Corporation (Mauritius), APMS Investment Fund, Elara India Opportunities Fund, Vespera Fund and LTS Investment Fund, along with other, unnamed entities.

These funds are described as holding stakes in listed Adani Group companies. The raw reports do not quantify the individual holdings or provide further financial details on the positions, focusing instead on the status of the settlement process with SEBI.

Accounts of the discussions between SEBI and the funds highlight two main areas of disagreement. Some funds were reportedly unwilling to provide information that SEBI viewed as necessary to conclude a settlement, limiting the regulator’s ability to close the cases under its settlement framework.

In other instances, funds are said to have resisted SEBI’s demands to disgorge amounts the regulator had sought as part of a potential resolution. This combination of incomplete information and opposition to disgorgement terms contributed to the rejection of the settlement applications.

With the settlement applications rejected, SEBI is now expected to pursue its existing regulatory and legal processes against the overseas funds in question. This implies that the matters will continue under the standard adjudicatory route rather than being concluded through negotiated settlements.

The raw reports do not specify a timeline for the next stages of SEBI’s actions or detail the exact nature of the potential violations being examined. They also note that, at the time of reporting, neither SEBI nor the overseas funds had issued on-the-record public statements about the rejection of the settlement bids.