In the past one year, Adani Transmission shares have gone up by 669%, Adani Total Gas shares have risen by 349%, Adani Enterprises shares have soared 972% and Adani Green has gained 254%. Adani Ports and Adani Power have advanced 147% and 295%, respectively, in this period.
Mumbai: National Securities Depository Ltd (NSDL) has frozen the accounts of three foreign funds — Albula Investment Fund, Cresta Fund and APMS Investment Fund — which together own over ₹43,500 crore worth of shares in four Adani Group companies. These accounts were frozen on or before May 31, as per the depository’s website.
The freeze on the three accounts could be because of insufficient disclosure of information regarding beneficial ownership as per the Prevention of Money Laundering Act (PMLA), said top officials at custodian banks and law firms handling foreign investors.
“The freeze could be because of inadequate beneficial ownership documentation,” said a senior official with a custodian aware of the development. “Custodians typically warn their clients before such action but if the fund doesn’t respond or fails to comply, accounts can be frozen.”
An account freeze means the funds would not be able to sell any of the existing securities nor buy any new securities.
Emails sent to NSDL, Securities and Exchange Board of India (Sebi) and Adani Group remained unanswered. Albula, Cresta and APMS could not be reached for comments. The three funds are registered with the Sebi as foreign portfolio investors (FPIs) and are based out of Mauritius.
The entities, which are registered at the same address in Port Louis and do not have websites, together hold 6.82% in Adani Enterprises NSE 0.87 %, 8.03% in Adani Transmission, 5.92% in Adani Total Gas and 3.58% in Adani Green.
New Rules
Adani Group has six listed companies. The other two are Adani Ports and Adani Power.
The capital markets regulator had revamped the know your customer (KYC) documentation for FPIs in line with PMLA in 2019. Funds were given time till 2020 to comply with the new norms, failing which their demat accounts would be frozen. Under the new rules, FPIs were required to submit few additional details including disclosures on common ownership and personal details of key employees of the fund such as fund managers.
Separately, Sebi is also learnt to be investigating whether there has been price manipulation in Adani Group stocks, which have gained between 200% and 1000% in the past one year.
“Sebi initiated a probe in 2020 and the investigation is still ongoing,” said a person familiar with the matter. Sebi did not respond to a query on the matter.
In the past one year, Adani Transmission shares have gone up by 669%, Adani Total Gas shares have risen by 349%, Adani Enterprises shares have soared 972% and Adani Green has gained 254%. Adani Ports and Adani Power have advanced 147% and 295%, respectively, in this period. The total market capitalisation of Adani Group was ₹9.5 lakh crore on Friday, making chairman Gautam Adani the second richest man in Asia.
The promoter group owns 74.92% in Adani Transmission, 74.92% in Adani Enterprises, 74.80% in Adani Total Gas, and 56.29% in Adani Green. The relatively low free float of the group stocks has been a subject of discussion and comment in market circles.
