SEBI Approves Settlement for Gautam Adani and Four Firms Over Shareholding Norms Violation

The Securities and Exchange Board of India (SEBI) has recently granted clearance to Gautam Adani, the chairperson of the Adani Group, along with four of its affiliated companies, allowing them to resolve a case concerning the breach of minimum public shareholding regulations. This settlement comes at a cost of ₹1.4 crore, a decision announced on Monday.

In India, all companies listed on the stock exchange are mandated to maintain a minimum public shareholding of 25%. The regulatory body had initiated proceedings against major entities of the Adani Group, including Adani Enterprises, Adani Power, Adani Ports and Special Economic Zone, and Adani Transmission, now known as Adani Energy Solutions. These investigations followed complaints received in mid-2020 alleging that these firms did not comply with the stipulated public shareholding norms.

Interestingly, in the SEBI’s settlement order, there was no explicit reference to the regulatory findings regarding these alleged violations. The latest developments form part of a broader scrutiny involving the Adani Group, which has faced a total of 24 investigations by SEBI, particularly after a controversial report by American short-seller Hindenburg Research in January 2023. This report accused the conglomerate of engaging in practices that constituted the ‘largest con in corporate history,’ including accounting fraud and stock manipulation.

The allegations from the Hindenburg report had a significant impact on the share prices of Adani Group’s listed firms, leading to a staggering loss of over $100 billion for investors at that time. The group has consistently denied these accusations, asserting that they are baseless and part of a concerted effort to undermine the company’s reputation.

In addition to the settlement involving Gautam Adani, SEBI also cleared his elder brother, Vinod Adani, of accusations regarding his control over certain companies. This clearance is likely to ease some of the regulatory pressures facing the Adani Group, although the implications of the ongoing investigations remain to be fully resolved.

Source: scroll.in