India’s market regulator is investigating possible violation of ‘related party’ transaction rules in the Adani Group’s dealings with at least three offshore entities that have links to the brother of the conglomerate’s founder, two people said.
The three entities allegedly entered into several investment transactions with unlisted units of the ports-to-power conglomerate founded by billionaire Gautam Adani over the last 13 years, said the sources with direct knowledge of the matter.
Vinod Adani, Gautam Adani’s brother, is either a beneficial owner, director or has links with those three offshore entities, said the two sources, adding the regulator, the Securities and Exchange Board of India (SEBI), is probing if lack of that disclosure violated ‘related party transaction’ rules. Under Indian laws, direct relatives, promoter groups and subsidiaries of listed companies are considered related parties.
A promoter group is defined as an entity that has a large shareholding in a listed company and can influence company policy. Transactions between such entities have to be disclosed in regulatory and public filings and require shareholder approval above a specified threshold. Violations typically attract monetary fines.
