FPIs Lotus Global, LTS withdraw pleas in SAT vs SEBI disclosure rules
This story was originally published at 20:12 IST on 12 September 2024
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MUMBAI – Foreign portfolio investors Lotus Global Investments and LTS Investment Fund have withdrawn their appeals against the Securities and Exchange Board of India in a matter of compliance with SEBI's enhanced, granular-level disclosures by select, high-risk FPIs. The Securities Appellate Tribunal passed an order on Tuesday which it uploaded on its website late on Wednesday, stating that the advocates for the two FPIs "desire to withdraw" their appeals to set aside SEBI's circular dated Aug 24, 2023.
No reason was cited by the FPIs' advocates for the withdrawal of the appeal. As per SEBI's circular, any FPI holding more than 50% of its equity assets in a single Indian corporate group, or which, individually or along with its investor group, holds more than 250 bln rupees of Indian equity assets, had to disclose granular information of persons having any ownership interest, economic interest, or control in them on a full look through basis.
Failing such disclosures, such an FPI would have had to liquidate their holdings by Monday such that they did not exceed the 50% concentration or 250-bln-rupee equity assets thresholds.
Lotus Global Investments and LTS Investment Fund were apparently not in compliance with the 50% concentration threshold and also believed that they merited exemption from the additional disclosures that SEBI had provided for certain categories of FPIs such as sovereign funds, public mutual funds, university endowment funds, and public pooled investment vehicles. The two FPIs approached SEBI a few months ago, seeking exemption but were not successful. As such, they filed appeals with the appellate tribunal last month.
US short-seller entity Hindenburg Research claimed in its January 2023 report that Lotus Global Investments and LTS Investment Fund were shareholders in listed Adani group companies. The US firm alleged that the two FPIs 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.
The Congress party’s member of Parliament and general secretary Jairam Ramesh said in a post on X on Sunday 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". End
Reported by Rajesh Gajra
Edited by Avishek Dutta
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