National Securities Depository Ltd (NSDL) has frozen the accounts of three foreign funds that together own shares worth Rs 43,500 crore in four Adani Group companies. The accounts of Albula Investment Fund, Cresta Fund and APMS Investment Fund were frozen on or before May 31, as per the depository's website. An account freeze indicates that the funds would not be able to sell any of the existing securities or buy any new securities.
Officials at custodian banks that handle foreign investors said that the freeze on the three accounts could be because of insufficient disclosure of information regarding beneficial ownership under the Prevention of Money Laundering Act (PMLA), as mentioned in a report in The Economic Times. They stated that custodians usually warn clients of such action but if the fund does not respond or fails to comply then the accounts can be frozen.
Adani Group is yet to issue a statement. All the three funds, based out of Mauritius, are registered with Securities and Exchange Board of India (SEBI) as foreign portfolio investors (FPIs). They together hold 6.82 per cent in Adani Enterprises, 8.03 per cent in Adani Transmission, 5.92 per cent in Adani Total Gas, and 3.58 per cent in Adani Green, as mentioned by the daily. They are registered at the same address in Port Louis and don't have websites, the daily reported.
The capital markets regulator had reworked the know your customer (KYC) documentation for FPIs. Funds were given time till 2020 to comply with the new norms. If they were to fail, their demat accounts were to be frozen. The regulator sought additional information from FPIs, including disclosures on common ownership and personal details for key employees.
Adani Group has six listed companies, the other two being Adani Ports and Adani Power. Adani Group have gained between 200 per cent and 1,000 per cent in the past one year.
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