Regarding violation of Rule 19A of the Securities Contract Regulation Rules of 1957 (SCRR), the committee noted that SEBI has been suspecting 13 overseas entities of having links to the promoters of the Adani Group, and thereby, suspecting that the shareholding in the listed Adani stocks in the hands of those 13 entities would not qualify as ‘public shareholding’.
If such holding is not public shareholding, then the listed Adani companies would have violated Rule 19A of the SCRR.
The committee noted that the foundation of SEBI’s suspicion that led to the investigation into FPIs in the Adani-listed companies was that their ownership structure was opaque because the ultimate chain of ownership of the 13 overseas entities holding Adani stocks was not clear.
Adani, the committee said, has denied having promoted shareholding of above 75 per cent. It was SEBI’s long-standing suspicion that some of the public shareholders are not truly public shareholders, but were fronts for the promoters of these companies.
However, the committee found that each of the 13 entities have provided the details of the beneficial owners to the SEBI and to the respective reporting entities in compliance with Rule 9 of the Prevention of Money Laundering Rules (PMLA Rules).
Source: Barandbench
