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Informist, Monday, Sep 9, 2024

 

By Rajesh Gajra

 

MUMBAI – The Securities Appellate Tribunal will on Tuesday hear appeals filed by foreign funds Lotus Global Investments and LTS Investment Fund against the Securities and Exchange Board of India in a matter of regulatory norms requiring granular disclosures by select, high-risk foreign portfolio investors. The two FPIs are contending that they merit an exemption from the enhanced disclosures due to the investments in their funds being of a pooled nature, but SEBI asked them to comply with the enhanced disclosure regime when they approached it a few months ago seeking an exemption.

 

The two FPIs have apparently not complied with SEBI's new concentration norms for select FPIs who hold more than 50% of their Indian equity exposure in a single company or a corporate group. The new enhanced disclosure regime for select FPIs was introduced by SEBI in August 2023 and timelines were set. The last date for disclosures for non-exempt FPIs is today and such FPIs who don't disclose will have to unwind their portfolios to bring down their holdings in a single Indian company or corporate group to below 50% of their equity assets.

 

Lotus Global Investments and LTS Investment Fund are shareholders in listed Adani group companies, according to US-based Hindenburg Research. The short-seller had claimed in its January 2023 report that LTS Investment Fund and Lotus Global Investment were among the five supposedly independent foreign funds that held around 360 bln rupees of shares in the Adani Group's listed companies. It said that these five Mauritius-registered funds were controlled by Monterosa Investment Holdings, and had the same Mauritian address and multiple overlapping nominee directors.

 

Indian National Congress Member of Parliament and General Secretary Jairam Ramesh on Sunday, said in a post on X that FPIs such as Lotus Global Investments and LTS Investment Fund were used by the Adani Group in "a brazen attempt to bypass SEBI's regulations and amass benami stakes in its own companies".

 

On Aug 27, senior advocate Janak Dwarkadas requested the Securities Appellate Tribunal for an urgent listing of the appeal by Lotus Global Investments. On the same day, advocate Joby Mathew made a similar request for urgent listing of the appeal by LTS Investment Fund.  End

 

Edited by Avishek Dutta

 

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