Sebi clears Gautam, Vinod Adani of MPS norm violation

Mumbai: The Securities and Exchange Board of India exonerated Gautam Adani, Vinod Adani and other Adani family members from allegations of violating the minimum public shareholding (MPS) rule in four group companies.

Sebi, however, imposed a penalty of Rs 20 lakh each on UAE investor Nasser Ali Shaban Ahli and Taiwanese businessman Chang Chung-Ling, holding that they failed to furnish correct and complete information to the regulator on their links to funds that invested in Adani Group companies.

In a separate settlement order, the regulator said four Adani Group companies, chairman Gautam Adani and 13 others settled a case with it over alleged violations of the MPS rule by paying Rs 1.48 crore. This was the third settlement order this month by Sebi involving the Adani Group.


The latest settlement covers proceedings against Adani Enterprises, Adani Power, Adani Ports & Special Economic Zone and Adani Transmission (now Adani Energy Solutions), and their directors and other executives.

Sebi received complaints in June and July 2020, alleging non-compliance of the MPS rule by certain listed Adani Group companies. After a preliminary examination, Sebi initiated an investigation on October 23, 2020, and issued a show-cause notice to 30 entities including individuals in September 2024, followed by a supplementary notice in March 2025.

The main allegation was about violation of the MPS requirement that mandates a minimum 25% public shareholding. It was alleged that investments by two foreign portfolio investors — EIFF (Emerging India Focus Funds) and EMR (EM Resurgent Fund) — in the shares of Adani Enterprises, Adani Power, Adani Ports and Adani Transmission; and Opal in Adani Power were made at the direction of Vinod Adani and that the funds were controlled by him.

The regulator in its show cause notice alleged an aggregate wrongful gain of about Rs 1,984 crore earned through the investment structure.

The regulator said the allegations of MPS and fraudulent trading violations against the individuals and entities covered by the proceedings had not been established.

Sebi said there was insufficient evidence to establish that Vinod Adani exercised effective control over two foreign portfolio investors.

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According to the allegations, the investments made by EIFF and EMR between June 2013 and June 2018 were by entities effectively controlled by Vinod Adani and so their stake should be treated as promoter-group holdings and not public shareholding.

According to Sebi’s show-cause notice, the two FPIs had Global Opportunities Fund Ltd as a common economic interest shareholder, with four underlying investors accounting for almost all of the funds invested by the FPIs in the Adani companies. The four investors were linked to Nasser Ali Shaban Ahli and Chung. The alleged structure also involved Global Macro Asset Management Ltd and Excel Investment Advisory Services Ltd, with the latter alleged to be controlled by Vinod Adani.

Sebi said the key allegation — that Vinod Adani controlled the investment decisions of the two FPIs — was not established.

“It has been held that there is no evidence to demonstrate involvement of Mr Vinod Adani in the decision-making process of investments of the two FPIs in Adani Group companies. Thus, it has been held that the investigation has not been able to prove that Mr Vinod Adani controlled the decision of investment of the two FPIs in Adani Group of companies through Excel,” Sebi wholetime member Kamlesh Varshney said in his 81-page order.

The regulator said commercial influence, longstanding business associations or familial relationships, by themselves, cannot establish “control” under securities laws. Such control must be supported by evidence showing an ability to positively direct the management or policy decisions of an entity.

The order said there was no evidence of Vinod Adani positively directing the management or policy decisions of the two FPIs or Opal Investments, which had separately been alleged to have breached MPS requirements through their holding in Adani Power.

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“Since the foundational allegation of effective control over the FPIs as well as Opal has not been established, the consequential allegation relating to violation of the minimum public shareholding requirements has not been upheld,” Sebi said.

The regulator rejected the related allegations under the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations. “Once the allegation of MPS violation fails, the subsequent allegation invoking the PFUTP Regulations also does not survive,” Sebi said.

However, Sebi found that Nasser Ali Shaban Ahli failed to respond to summons issued during the investigation, while Chung furnished incomplete and misleading or false information concerning his connections with Vinod Adani and Nasser Ali Shaban Ahli, as well as the source of funds relating to Opal.

The regulator said settlements done by Gautam Adani, the Adani Group companies and other individuals would not be impacted by the final order.