SEBI withdraws stock case against Vinod Adani, finds no evidence he controlled offshore funds

Markets regulator SEBI said it could not prove that Vinod Adani, brother of Adani Group chairman Gautam Adani, controlled two offshore funds that invested in four group companies and therefore dropped the minimum public shareholding (MPS) and fraud charges against him and 11 other notices.

In an 81-page final order, the Securities and Exchange Board of India (SEBI) said its investigation did not establish that Mr. Vinod Adani directed the investment decisions of two foreign portfolio investors (FPIs), Emerging India Focus Funds (EIFF) and EM Resurgent Fund (EMR), or controlled Opal Investments’ investments in Adani Power Ltd.

“The investigation has not been able to establish that Mr. Vinod Adani controlled the investment decisions of the two FPIs,” SEBI Permanent Member Kamlesh Chandra Varshney said in the order.

The case centered on the MPS requirement, which mandates at least 25% public ownership in listed companies. SEBI said that a violation of the MPS would occur if the shares held by public shareholders were actually owned or controlled by the promoter or a group of promoters and if counted as promoter holdings would reduce the public shareholding below the required threshold.

The regulator said there was no allegation that Mr Vinod Adani or the promoter group were the beneficial owners of the shares held in the names of the two FPIs or Opal. The charge was that he controlled the shares because the investments were made on his instructions.

However, SEBI has said that de facto control must be based on evidence that a person positively directs management or policy decisions and cannot be inferred from mere suspicion or business or financial relationships.

“Merely on the basis of business or financial relationships, it cannot be said that Mr. Vinod Adani controls all of them,” the order said.

The regulator also found no evidence that Mr Vinod Adani controlled Nasser Ali Shaban Ahli or Chang Chung-Ling and through them the investment decisions of the underlying investors who invested in Adani group companies.

“Any such conclusion would have unintended consequences for the implementation of various securities laws in the capital market,” SEBI said.

It was alleged that the investments in Asia, Lingo, the Gulf of Arya and the Middle East were ultimately financed by Mr Ahli through several layers of entities, while the investment advice for the acquisition of shares in Adani group companies was provided by Excel Investment Advisory Services Limited (Excel), which is said to be controlled by Mr Vinod Adani.

While EIFF and EMR were the immediate investors of the FPI, Global Opportunities Fund Limited (GOFL) acted as participating redeemable shareholder of EIFF Class J. GOFL was the sole investor of EIFF’s J Class share and it is alleged that all investments made by EIFF in Adani group companies were made through EIFF, the participating redeemable shareholder of EIFF.

It was further alleged that Excel entered into an investment advisory agreement with Global Macro Asset Management Limited (GMAML), GOFL’s investment manager, whereby Excel advised GMAML on investments relating to specific underlying investors. It is alleged that GMAML actually only implemented investment decisions communicated through Excel.

However, SEBI said the advisory agreement between Excel, which was under the control of Mr. Vinod Adani, and GMAML, which took investment decisions for the two FPIs, did not establish such control. The agreement stated that the advice was non-binding and did not apply to Excel group companies, and the investigation found no evidence that the advice was provided in breach of those provisions.

SEBI also said that the investigation did not yield evidence to prove the involvement of Mr. Vinod Adani in the investment decisions of the two FPIs.

“Violation of the MPS requirement is not established for lack of adequate evidence of positive management or policy decision-making by investors in the Adani Group companies,” the order said.

As the MPS allegation was not proven, the related charges under the Prevention of Fraudulent and Unfair Trade Practices (PFUTP) Ordinance also failed.

“Once the allegation of violation of the MPS fails, the subsequent allegation invoking the PFUTP Regulations will not survive,” SEBI said.

Still, SEBI imposed penalties of ₹20,000 on Mr. Ahli and Mr. Chang for not providing correct and complete information. A third whistleblower, Tejal Ramanlal Desai, was found not liable for this charge.

The order said Mr. Chang’s denial of any relationship “points to a deliberate attempt to distort the investigation.”

SEBI also said, “Cooperation from the notification party could have expedited the investigation.”

Both fines must be paid within 45 days of receiving the order.

Adani Enterprises Ltd, Adani Power Ltd, Adani Ports and Special Economic Zone Ltd and Adani Energy Solutions Ltd, formerly Adani Transmission, along with Mr Gautam Adani and 13 other directors, separately settled the MPS proceedings without admitting guilt.

The settlement amount of ₹1,48,20,000 was paid on August 26, 2026. SEBI said the settlement was not affected by Monday’s order.

“Although no violation of the MPS has been established, it has been decided to allow the settlement to enter into force,” the order said.

“Settling the case for a sufficiently higher settlement price without admitting fault serves the important purpose of mitigating litigation,” he added.

SEBI launched an investigation on 23 October 2020 following complaints received in June and July of the same year about alleged violations of MPS requirements at Adani group companies.

A show-cause notice issued on 27 September 2024 alleged that EIFF and EMR held stakes in four Adani group companies between June 2013 and June 2018 and were treated as public shareholders despite being allegedly controlled by Mr Vinod Adani, a member of the promoter group.

A supplementary notice issued in March 2025 put the alleged ill-gotten gains at around ₹1,984 crore.

The allegations did not allege that Mr. Vinod Adani was the beneficial owner of the investments or that he financed them.

SEBI said it had reached a similar finding on the allegation regarding Opal Investments’ stake in Adani Power.

In its final directions, the regulator said that the allegations of breach of the MPS and breach of the PFUTP had not been proven against notifications 1 to 12 and that enforcement directions were therefore not warranted.

The order was passed by Mr. Varshney on September 28, 2026.