Shares of all six listed Adani Group companies fell on Monday by up to 20 per cent in intra-day trade. This comes on report after the National Securities Depository Ltd (NSDL) froze accounts of three foreign funds that own stake in four of Adani group companies.
These are Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power, Adani Transmission, Adani Green Energy and Adani Total Gas.
“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),” a report on The Economic Times mentions.
Custodians usually warn clients of such actions in advance. But if the fund does not respond, or fails to comply, then they freeze the accounts.
An account freeze means the funds would not be able to sell any of the existing securities nor buy any new ones.
Adani Group is yet to issue a statement on the same. Moreover, all the three funds are registered with SEBI as foreign portfolio investors (FPIs).
The capital markets regulator after reworking the KYC documentation for FPIs had given time till 2020.
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.