Four funds that have a large investment in India’s second richest Gautam Adani-promoted firms have a history of investing in the companies that have defaulted on repayment to bank. The opposition has demanded an investigation for alleged round-tripping.
These funds are also among the largest foreign shareholders in Winsome Diamonds and Jewellery Ltd., Sterling Biotech Ltd., Ruchi Soya Industries Ltd. and Karuturi Global, companies they previously invested in that went bankrupt or are under investigation. They have a record of putting the wrong bets.
These four Mauritius-based funds – Cresta, Albula, Elara and APMS – have shareholdings in Adani Enterprises, Adani Transmission, Adani Green Energy and Adani Total Gas, shareholding pattern of the company shows.
In June, a media report had claimed that A news report in a leading business daily on June 14 had claimed that the National Securities Depository Ltd (NSDL) has frozen shares of three foreign portfolio investors (FPI) owning around Rs45,000 crore worth of Adani shares. The entities are based in Mauritius, an offshore investment hub. The identities of these funds are not known yet, raising doubts about the quality of investors in the Adani group companies.
As per reports and investigation by various agencies Winsome Diamonds and Jewellery Ltd had defaulted to the tune of Rs7,000 crore. Sandesara brothers promoted Sterling Biotech Limited has loan defaults over Rs15,000 crore. Both brothers have fled the country and have taken refuge in Nigeria. Edible oil major, Ruchi Soya Industries had defaulted for loans of Rs 8,377 crore to a consortium of banks. However, the company was taken over by Baba Ramdev through the Insolvency and Bankruptcy Code (IBC) process. Once the largest exporter of cut roses from India, Karutiri Global is also under the hammer.
According to Bloomberg, as of Dec. 31, 2011, Elara, Cresta and Albula together held a 8.62 per cent stake in Winsome Diamonds; All four funds each held at least a 1 per cent stake in the company at some point in the six years to June 30, 2015.
Albula had a 5.25 per cent stake in Sterling Biotech, and Elara held 1.64 per cent as of March 31 this year, data filed with the Bombay Stock Exchange show. They started building a position in 2010, and by March 2016 together held about 8.5 per cent of the company.
Cresta and Albula each held an identical 6.86 per cent in Ruchi Soya in September 2009. By December 2015, they were joined by Elara, with each holding a little over 4% and a combined stake of almost 13%. Ruchi Soya entered bankruptcy two years later and was declared a wilful defaulter.
Elara India Opportunities Fund, part of London-based Elara Capital Ltd., also held a 7.58 per cent stake in now-liquidated flower company Karuturi Global in 2011, before slowly reducing its holding and eventually exiting or cutting it down to below 1 per cent in 2018.
Meanwhile, the government in a written reply had informed the parliament that stock market regulator SEBI is investigating the case related to Adani Group. However, it is not clear that the holdings of these four funds are being investigated or not. Mahua Moitra of TMC is actively pursuing this case.