Adani MPS case takes a twist: Group pays Rs 1.48 crore to settle, while SEBI finds the same violation not…

Reports coming in for today mention that The Adani Group has paid Rs 1.48 crore to settle minimum public shareholding (MPS) enforcement proceedings with the Securities and Exchange Board of India (SEBI), even as the regulator, in a separate order, found that allegations of Vinod Adani's control over investments in the same four firms could not be established.

The two orders, issued on late Monday evening, relate to separate proceedings and have different outcomes.

The settlement covers Adani Enterprises, Adani Power, Adani Ports and Special Economic Zone, and Adani Transmission, now known as Adani Energy Solutions, along with 14 individuals, including Gautam S Adani and Rajesh S Adani.

Each of the four firm-and-director groups paid Rs 37.05 lakh jointly and severally, taking the total settlement amount to Rs 1.48 crore.

Importantly, the settlement does not amount to a finding that the firms or individuals committed the alleged MPS violations. The applicants settled the proceedings without admitting or denying the facts and conclusions of law.

MPS proceedings date back to 2020

SEBI began its investigation in October, 2020, following complaints received in June and July that year alleging non-compliance with MPS requirements.

The regulator issued its main show-cause notice on September 27, 2024, followed by a supplementary notice on March 3, 2025.

The allegations concerned Rule 19A of the Securities Contracts (Regulation) Rules, 1957, Stock-exchange debut Agreement, and Stock-exchange debut Obligations and Disclosure Requirements Regulations.

Legal experts stated that, probably group was not aware that the separate proceedings concerning Vinod Adani could result in SEBI not sustaining the alleged MPS violation. The two matters, that stated, were dealt with separately by the regulator.

Vinod Adani control not established

In the separate order, SEBI examined investments by Emerging India Focus Fund and EM Resurgent Fund in Adani Enterprises, Adani Power, Adani Ports and Adani Transmission.

The regulator examined whether the investments were controlled by Vinod Adani and as a result should have been attributed to the promoter group while calculating compliance with the 25 percent MPS requirement.

SEBI stated its show-cause notice did not allege that Vinod Adani was the beneficial owner of shares held by the two funds or through Opal. Rather, the allegation was that he exercised control over the investments.

The regulator examined business relationships, funding arrangements, powers of attorney and an investment-advisory agreement between Excel, an entity controlled by Vinod Adani, and GMAML, which took investment decisions for the two funds.

SEBI stated the advisory agreement provided that the advice was non-binding and would not relate to Excel group firms. It found no evidence that these conditions were breached or that Vinod Adani participated in investment decisions involving Adani group firms.

The regulator additionally examined Vinod Adani's business and financial relationships with Nasser Ali Shaban Ahli and Chang Chung-Ling.

SEBI stated such business or financial relationships, by themselves, were not sufficient to establish control over the investments.

As the alleged control could not be established, the regulator stated the related MPS allegation could not be sustained. The connected allegation under the Prohibition of Fraudulent and Unfair Trade Practices regulations additionally did not survive.

SEBI, Whole Time Member , Varshney linked the MPS allegation directly to the question of effective control over the FPIs. In order he stated, “Since the foundational allegation of effective control over the FPIs as well as Opal has not been established, the consequential allegation relating to violation of the minimum public shareholding requirements has not been upheld. Thus, it has been held that violation of MPS requirement is not established for the lack of adequate evidences of positively directing management or policy decision of market participants in Adani Group Firms”.

He then extended the same reasoning to the PFUTP charge, saying, “Once the allegation of MPS violation fails, the subsequent allegation invoking the PFUTP Regulations additionally does not survive. Notwithstanding, it has further been discussed how the invocation of the PFUTP Regulations was not in line with the judgment of Hon’ble Supreme Court”.

SEBI, that stated, imposed penalties of Rs 20 lakh each on Ahli and Ling for failing to provide correct and complete information during the investigation.