NSDL and Finance Ministry needs to break the Silence and Come Out with the Truth
The last 15 months have been very harsh on the citizens of our great nation. India’s middle class shrunk by 3.2 Cr & 7.5 Cr people were pushed below poverty line in 2020. As per CMIE, close to 97% of Indians became poorer during the last year. While the BJP government was hellbent in proving that the economic recovery was going to be V-Shaped, it turned out to be otherwise. The divide between the rich and the poor has widened.
A new revelation came to light yesterday in the form of a story being carried out by a leading media house. As per the news report, National Securities Depository Ltd (NSDL), which is an Indian central securities depository under the jurisdiction of Ministry of Finance, Government of India, has frozen the accounts of three foreign funds:
1. Albula Investment Fund
2. Cresta Fund
3. APMS Investment Fund
These three funds together own over Rs 43,500 crore worth of shares in four Adani Group companies.
The aforementioned funds are all registered at the same address in Port Louis, Mauritius and do not have websites.
These funds together hold 6.82% in Adani Enterprises, 8.03% in Adani Transmission, 5.92% in Adani Total Gas and 3.58% in Adani Green.
The aforementioned funds derive more than 95% of their net worth from their investments in the Adani Group companies
Foreign Portfolio Investor
Networth Due to Adani Shares
1. Albula Investment Fund– 95.40%
2.Cresta Fund-97.40%
3.APMS Investment Fund-96.18%
As per SEBI guidelines, a Foreign Portfolio Investor (FPI) can’t hold more than 10% equity stake in any listed Indian firm. It is important to understand the ultimate beneficial ownership of these funds as these funds have the same address and don’t even have websites that raises suspicion further.
Also, there has been a meteoric rise in the share prices of the Adani Group companies in the last 12 months. As the news report suggests, in the last 12 months, Adani Transmission shares have gone up by 669%, Adani Total Gas shares have gone up by 349%, Adani Enterprises shares have gone up by 972% and Adani Green has gone up by 254%. The two Adai group companies where these 3 funds do not have investments: Adani Ports and Adani Power have soared 147% and 295%, respectively, in the last 12 months.
In the middle of all the confusion, Adani Enterprises Limited came out with a statement on June 14th 2021, saying that the Demat account in which the aforesaid funds hold the shares of the company are not frozen. Certain other reports suggest that the accounts frozen by NSDL were depository accounts.
We have three very specific questions:
1. Why has NSDL, which is under the jurisdiction of Ministry of Finance, not come out with a public statement in the middle of all the confusion- whether accounts of these funds pertaining to the investments in the Adani group companies have been frozen and which ones are active?
2. SEBI and NSDL should reveal the nature and background details of these three foreign funds, who are the ultimate beneficial owners of these funds that have greater than 95% of their net worth due to Adani shares only, and what have SEBI and NSDL uncovered already about these funds?
3. Why have these 3 funds not come out with a clarification statement yet on these events? Why is only Adani Enterprises Limited coming out with clarifications and other 3 Adani group companies, where these funds have an investment, have not come out with a statement?
The Congress party demands that SEBI and NSDL come out with a complete disclosure about the nature of these funds, ultimate beneficial ownership of these funds, the findings of their enquiry (if any), what securities these funds hold and why were their accounts frozen? Based on the findings of the news report, we also demand that if SEBI’s ongoing investigation has revealed any irregularities with regards to price manipulation of Adani group stocks, Government of India should transfer the investigation to Enforcement Directorate to investigate the entire matter and come out with the truth for everyone to understand.