The regulator of the Indian stock market appears to be working urgently to restore its reputation by looking into the Adani Group. Vested interests are sure to oppose any new, contentious attempt to trace foreign cash back to its origin. However, the regulator cannot ever assert that a clean market is administered without such authority.
Recent findings of regulatory failure against the Securities and Exchange Board of India were avoided by a panel in New Delhi that the Supreme Court convened. Although it wasn’t exactly a vote of confidence, the committee’s description of the SEBI’s ongoing investigation into the nation’s largest infrastructure behemoth as “a journey without a destination” wasn’t any better.
The regulator informed the expert panel that it was looking into up to 13 mysterious organizations with addresses in Mauritius and Cyprus that, as of March 2020, held between 14% and 20% of the shares of the Adani Group, a company based in Ahmedabad, at five publicly traded companies.
Those are a lot of figures. The SEBI wants to determine whether the 42 investors who contributed money to these 13 vehicles—12 funds and one foreign financial firm—are not just sham entities controlled by Gautam Adani and his family. In a report published on January 24 by New York-based short-seller Hindenburg Research, the conglomerate had vehemently refuted those claims, stating that any “innuendoes” that any of the public shareholders “are in any manner related parties of the promoters are incorrect.”
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Adani’s role in this:
The Adani Group is the most well-known example of a sizable stock market wealth supported by an opaque foreign finance source, but it is not the only one. How will India ever be able to track down cash that changes forms to its real owners? The SEBI’s strategy is apparently straightforward and rules-based and has been made available for public feedback.
All pension pools as well as governmental funds with a varied retail base will remain unaffected. Sovereign wealth funds and other foreign investors connected to governments or central banks will also be exempt.
Although the market value of Adani shares has recovered from its post-Hindenburg lows, it is still $100 billion weaker than it was before the short-seller’s attack compelled entrepreneur Gautam Adani to postpone a share sale. With the support of US-based GQG Partners, the billionaire from Gujarat, the home state of Modi, is once more prepared to convince institutional investors to support billions of dollars in fresh financing. The group revealed the conclusion of a $2.65 billion deleveraging programme in a credit update on Monday. In March, net debt decreased from 3.81 times EBITDA to 3.27 times. According to the statement, cash on hand and operating cash flow will comfortably surpass the amount of debt expiring in the current and following fiscal years.
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