Aborted FPO: SEBI probes Adani-investors links

The market regulator is investigating Adani Grouprsquos links to some of the investors in the conglomeratersquos aborted 25 billion share sale two sources said amid growing concern in New Delhi about a US shortsellerrsquos allegations against one of the countryrsquos top industrial groupsThe Securities and Exchange Board of India SEBI is looking into any potential violation of Indian securities laws or any conflict of interest in the share sale process said the two sources who have direct knowledge of the matterSEBI is investigating relationships between Adani and at least two Mauritiusbased firmsmdashGreat International Tusker Fund and Ayushmat Ltdmdashthat participated as anchor investors among others said the sources who spoke on the condition of anonymity due to the confidential nature of the probeGautam Adani and PM Narendra Modi The corporate affairs ministry has briefed the PMO on the issue govt officials told Reuters File picUnder Indiarsquos capital and disclosure requirement rules any entity related to a companyrsquos founder or the founder group is ineligible to apply under the anchor investor category One of the sources said the focus of the probe would be whether any of the anchor investors are ldquoconnectedrdquo to the founder groupThe portstoenergy conglomeratemdashcontrolled by billionaire Gautam Adani one of the worldrsquos richest peoplemdashhas been accused of improper use of offshore tax havens and stock manipulation Adani has denied the chargesAlso Read SC seeks views of Centre SEBI on Hindenburg report on Adani firmsAlso under the SEBI scanner are Elara Capital and Monarch Networth Capital two of the 10 investment banks that managed the share offering the sources said adding that SEBI had approached the two firms last weekThe roles of Elara and Monarch are being examined by the market watchdog to rule out ldquoany conflictrdquo in the share offering process one of the sources saidHindenburg has alleged one Adani private entity had a small ownership stake in Monarch saying that ldquothis close relationship seems to pose an obvious conflict of interestrdquo It also alleged that a Mauritiusbased fund of Elara has invested 9937 of its market value in three Adani stocksThe corporate affairs ministry responsible for regulating Indian businesses has briefed officials in Prime Minister Narendra Modirsquos office and been in touch with SEBI the market regulator one of the officials said Reuters could not determine the specific details of these discussions which have not been previously reportedAdani crisis deepensMeanwhile Moodyrsquos downgraded on Friday the ratings outlook for some Adani Group entities while MSCI said it would cut the weightings of some companies in its indexes MSCI reassessed the size of some Adani companiesrsquo free floats having determined there was ldquosufficient uncertaintyrdquo surrounding some investors in Adani companies04No of firms banks part of SEBI probeSC Investor interests must be protectedThe Supreme Court hearing two petitions related to large investor losses following Hindenburg Researchrsquos report on the Adani Group said on Friday that interest of the investors needs to be protected ldquoNow the stock market is not a place where only highvalue investors invest It is also a place where investment is made by a wide spectrum of middle classrdquo Chief Justice D Y Chandrachud said ldquoThe point of concern here is how to protect the interest of investorsrdquo The SC sought views of the Centre and market regulator SEBI on PILs alleging exploitation of innocent investors and ldquoartificial crashingrdquo of the Adani Grouprsquos stock value The hearings will continue on MondayThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever