Adani Group A/Cs With Rs 43,000 Crore Suspended; Did They Manipulate Share Prices?

While the shares of Adani Ports and Adani Transmission were down by 15% each, the shares of other four companies were down by 5% each in the opening session today morning (June 14).

Over $7.6 billion (approx. ?55,000 crore) net worth of Gautam Adani has been wiped out due to the downward spiral in the share prices of the companies.

Accounts That Have Invested ?43,000 Crore Suspended

The accounts of three foreign funds namely, Albula Investment Fund, Cresta Fund and APMS Investment Fund, based out of same address have been suspended on May 31 by the National Securities Depository Limited (NSDL). These accounts have collectively invested over ?43,000 crore in the Adani Group.

This suspension could be due to insufficient disclosures under the Prevention of Money Laundering Act (PMLA).

Details of common ownership and personal details of key employees were to be disclosed till 2020 by these funds, which they failed to as a result of which the account was frozen.

Beyond a certain limit, managers are not allowed to invest in any one stock or group as per the rules for Indian funds. However, these rules don’t apply to the foreign portfolio investors.

These three funds, according to a research and media company, The Morning Context, derive more than 95% of their net worth from their investments in the Adani Group companies.

Main Fears Regarding These Funds

Two main fears, one is the inflation of value of shares due to the hoarding by funds to reduce the number of tradable shares in the market. Second is the round tripping by the Indian investors, in order to bypass the rules applicable to Indian investors. Both, however, stay unproven yet.

The report added th?t  the  m?rket  regul?t?r,  Se?urities  Ex?h?nge  B??rd  ?f  Indi?  (SEBI),  is  investig?ting  if  the  sh?re  ?ri?e  ?f  ?d?ni  Gr?u?  ??m??nies  h?s  been  m?ni?ul?ted.  The  investig?ti?n  is  still  ?ng?ing,  the  re??rt  ?dded.

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