Adani Group shares dropped as much as 20 per cent on early trade on Monday after National Securities Depository Ltd (NSDL) had frozen the accounts of three foreign funds that together own shares worth Rs 43,500 crore in four Adani Group companies. Three Foreign Portfolio Investors (FPI) of Adani Group — Albula Investment Fund, Cresta Fund and APMS Investment Fund were frozen on or before May 31, as per the depository’s website, the Economic Times reported. These three FPIs together own more than Rs 43,500 crore worth of shares in Adani Enterprises, Adani Green Energy, Adani Transmission and Adani Total Gas.
The funds would not be able to sell any of the existing securities nor buy any new securities. The top officials at banks and law firms handling foreign investors said that it could be because of insufficient disclosure of information regarding beneficial ownership as per the Prevention of Money Laundering Act (PMLA), according to the report in the Economic Times.
All the three funds are based out of Mauritius and registered with Securities and Exchange Board of India (SEBI) as foreign portfolio investors (FPIs). They together hold 6.82 per cent in Adani Enterprises, 8.03 per cent in Adani Transmission, 5.92 per cent in Adani Total Gas, and 3.58 per cent in Adani Green, according to the report. They are registered at the same address in Port Louis, the report stated.
SEBI had revised the know your customer (KYC) documentation for FPIs and allowed time till 2020 to comply with the new norms. The regulator sought additional information from FPIs, including disclosures on common ownership and personal details for key employees.
Adani Group founder Gautam Adani has become the second wealthiest person in Asia after the recent surge in group stocks.