SEBI drops control allegations against Vinod Adani over offshore funds

India’s Securities and Exchange Board has dropped minimum public shareholding and fraud allegations against Vinod Adani and 11 other noticees after finding insufficient evidence that he controlled two offshore funds. In an 81-page final order, SEBI said its investigation did not establish that Vinod Adani directed investment decisions by Emerging India Focus Funds and EM Resurgent Fund, or controlled Opal Investments’ investment in Adani Power. The case concerned the requirement that at least 25% of a listed company be held by public shareholders.

The regulator said a violation would arise if shares held by public investors were beneficially owned or controlled by a promoter or promoter group, reducing public ownership below the required level. SEBI said there was no allegation that Vinod Adani or the promoter group beneficially owned the shares held in the names of the funds or Opal Investments. Instead, the allegation was that he controlled the shares by directing the investments.

The regulator said such de facto control had to be supported by evidence that a person positively directed management or policy decisions. Suspicion or business and financial relationships alone, it said, were insufficient. SEBI also found no evidence that Vinod Adani controlled Nasser Ali Shaban Ahli or Chang Chung-Ling and then used them to direct the underlying investors.

An investment advisory agreement involving Excel Investment Advisory Services, allegedly controlled by Vinod Adani, did not by itself establish control, the regulator said. The agreement described the advice as non-binding, and investigators found no evidence that its terms had been breached. Because the minimum public shareholding allegation was not established, the related allegations under fraud regulations also did not survive.

SEBI nevertheless imposed penalties of ₹20 lakh each on Ahli and Chang for failing to provide correct and complete information. Separate proceedings involving Adani companies, Gautam Adani and directors had been settled without admission of guilt. SEBI said that settlement, involving ₹1.482 crore paid on August 26, remained final.