According to Reuters, the Securities and Exchange Board of India (Sebi), India’s market regulator, has discovered that twelve offshore funds investing in Adani Group companies have violated disclosure regulations and exceeded investment limits. The report, citing unnamed sources, reveals that Sebi had previously identified breaches of disclosure rules by listed entities and offshore funds exceeding investment limits in August last year. The regulator was also investigating a potential coordination between one of the funds and Adani Group’s primary shareholders.

Earlier this year, notices were issued to twelve offshore investors associated with the Adani Group outlining allegations against them and seeking clarification on violations related to disclosure requirements and investment limits. However, these offshore funds were reporting their investments at an individual fund level instead of disclosing holdings at the group level as required by Sebi.

Sources suggest that eight of these offshore funds have requested to settle the charges by paying a penalty without admitting guilt. In the past, Sebi had identified 13 foreign portfolio investors (FPIs) for their failure to disclose information about their ultimate beneficial owners in listed Adani entities. Out of those 13 FPIs, eight are seeking resolution with Sebi regarding securities violation issues.

Several legal representatives for Albula Investment Fund, Cresta Fund, MGC Fund, Asia Investment Corporation (Mauritius), APMS Investment Fund, Elara India Opportunities Fund, Vespera Fund, and LTS Investment Fund have collectively submitted 16 settlement applications to Sebi. Additionally targeted by Sebi were five other entities: Emerging India Focus Funds, EM Resurgent Fund Polus Global Fund New Leaina Investments Opal Investments.

Nevertheless, Sebi encountered challenges during its investigation as they faced difficulties in identifying the ultimate beneficial owners of these FPIs alongside any potential connections they may have with the Adani Group.