India’s Securities and Exchange Board (SEBI) has issued warnings to two Mauritius-based funds—Elara India Opportunities Fund and Vespera Fund—threatening penalties and potential license cancellations for failing to disclose detailed shareholder information related to their investments in the Adani Group.
These funds have been under investigation since 2023, following allegations by Hindenburg Research that the Adani Group misused tax havens and violated rules concerning minimum public shareholding. Despite repeated requests, the funds have not provided the required “granular disclosures,” hindering SEBI’s investigation.
Indian regulations mandate that at least 25% of a listed company’s shares be held by public shareholders. Hindenburg alleged that the Adani Group breached these rules by having related offshore funds hold significant shares. SEBI’s document noted that Elara funds did not disclose acquisitions of certain Adani stocks exceeding 5%, as required by Indian regulations.
Although based in Mauritius, these funds are registered as Foreign Portfolio Investors (FPIs) in India, bringing them under SEBI’s jurisdiction. They have applied to settle the matter through a monetary fine without admitting guilt.
Additionally, at least two other Mauritius-based Adani investors, Lotus Investment and LTS Investment, have also failed to provide requested information. U.S. authorities have indicted Adani Group’s chairman, Gautam Adani, and others over alleged bribery and misleading investors, claims which the group denies.
SEBI and Elara Capital did not respond to any inquiries regarding the matter.