The Securities and Exchange Board of India (SEBI) has officially launched an investigation into the intricate relationship between the Adani Group, a prominent Indian conglomerate, and the Gulf Asia Trade & Investment fund, which is registered in the British Virgin Islands. This comprehensive probe seeks to ascertain whether any violations of share ownership regulations have occurred, primarily in response to allegations of accounting misconduct and manipulation of stock prices that have been lodged against the Adani Group.
Back in January, a scathing report from the short-selling firm Hindenburg Research raised significant concerns regarding governance within the Adani Group. The report alleged that offshore shell companies surreptitiously held stakes in publicly-listed companies under the Adani umbrella. These allegations cast a cloud of suspicion over the conglomerate, prompting SEBI to closely scrutinize its business affairs.
The Gulf Asia fund, reportedly under the ownership of Dubai-based entrepreneur Nasser Ali Shaban Ali, is said to have invested in Adani’s publicly-traded companies following a SEBI directive issued in June 2013. This directive mandated that companies raise their public shareholding to a minimum of 2 percent of their total shares.
By April 2014, Gulf Asia’s investments in Adani Enterprises and Adani Power had aggregated to a substantial $51.4 million. Over time, these investments allegedly ballooned to an impressive $202 million across four Adani entities, including Adani Transmission and Adani Ports. Notably, Adani Enterprises failed to disclose Gulf Asia as a related party in its annual reports, sparking concerns about transparency in the conglomerate’s operations.
SEBI’s officials are meticulously examining whether the Adani Group and the Gulf Asia fund collaborated in a manner that might have contravened regulatory provisions. This examination has the objective of ascertaining the exact nature of their relationship and the potential implications for the stakeholders involved.
It’s essential to note that the Adani Group has vehemently refuted all allegations of obscure financial dealings and accounting impropriety. In an earlier statement, the company dismissed these accusations as a calculated assault on India by vested interests and sections of the foreign media.