The Securities and Exchange Board of India (SEBI) has warned two Mauritius-based foreign portfolio investors—Elara India Opportunities Fund and Vespera Fund—that they could face regulatory action, including monetary penalties and potential cancellation of licences, for failing to disclose crucial shareholding information despite repeated reminders over the past two years.

According to a SEBI document dated March 28, accessed by Reuters, the funds, which hold significant investments in the Adani Group, have not provided the regulator with detailed shareholder data. SEBI has been seeking “granular disclosures” from these entities since 2023, particularly due to their "concentrated positions" in Adani companies.

However, the funds have not complied, nor have they furnished any explanation for the delay.

SEBI noted that the continued non-disclosure has obstructed its probe into whether the Adani Group adhered to India’s minimum public shareholding norms.

The document further stated that the funds also failed to report their acquisitions of certain Adani stocks that crossed the 5% threshold, a disclosure mandated under Indian regulations. It did not specify which holdings triggered the requirement.

The funds’ opacity has come under increased scrutiny as the Adani Group and a group of 13 offshore investors remain under investigation following allegations by US-based Hindenburg Research in 2023.

The report accused the conglomerate of exploiting tax havens and manipulating stock prices, leading to a massive sell-off in Adani stocks. The group has consistently denied any wrongdoing, and its market performance has since stabilised.

Neither SEBI, Elara Capital, nor the Adani Group responded to Reuters' requests for comment on the matter.