More Stories

Informist, Monday, Sep 9, 2024

 

MUMBAI – Securities and Exchange Board of India's rules that require foreign portfolio investors not to be over-invested in a single stock or corporate group must be upheld at all costs, Indian National Congress Member of Parliament and General Secretary Jairam Ramesh said on Sunday in a post on X, formerly Twitter. Ramesh said these rules are critical since they ensure that black money routed through tax havens does not flood back into the Indian capital market.

 

Ramesh made these comments in the context of a news report by MoneyControl.com on late Friday which quoted sources as saying that two foreign investors, LTS Investment Funds and Lotus Global Investment, have filed appeals with the Securities Appellate Tribunal against SEBI's direction to them to comply with the concentration norms. These norms require all FPIs that hold more than 50% of their equity holdings in a single company or a corporate group to disclose all details of the beneficial ownership in their funds or begin unwinding their portfolios from today.

 

US-based Hindenburg Research had alleged in its Jan 24, 2023 report that LTS Investment Fund and Lotus Global Investment were among five supposedly independent foreign funds that held around 360 bln rupees of shares in the Adani Group's listed companies. These five funds, controlled by Monterosa Investment Holdings, were all formed out of Mauritius by the same incorporator, had the same address, and had multiple overlapping nominee directors.

 

Quoting holdings data as per Trendlyne disclosures, Hindenburg said that LTS Investment Fund had 97.9% of its investments in Adani Group companies. The US short seller further quoted a former trader banned from Indian markets for manipulating stocks using Mauritius-based funds as saying that SEBI officials were aware about conglomerates using Mauritius-based funds to flout the minimum 25% public shareholding norm. Monterosa was a conduit to cut the trails and conceal the identity of the Indian corporate group routing cash from overseas back into the shares of its listed companies.

 

Hindenburg Research had further alleged that a related party entity of Adani Enterprises, when it was called Adani Exports, was an investor in Lotus Global Investments over a two-year period around 2007.

 

According to Congress party's Ramesh, such FPIs were used by the Adani Group in "a brazen attempt to bypass SEBI's regulations and amass benami stakes in its own companies," a SEBI investigation into these violations that was supposed to be completed in two months is still languishing 18 months later, he said. "SEBI has a lot to explain, quite apart from the multiple conflicts of interest of its Chairperson (Madhabi Puri Buch) that are now unravelling," Ramesh said.  End

 

Reported by Rajesh Gajra

Edited by Aditya Sakorkar

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.