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New Delhi. In the case to Adani Group, the Securities and Exchange Board of India (SEBI) has adopted a very strict stance towards foreign portfolio investors (FPIs). The regulator has outrightly rejected the compromise applications filed by these foreign funds. With this strict action of SEBI, it has become clear that in case of violation of rules, direct and strict legal action will now be taken against these funds.

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Talks were not made on terms, allegations of hiding information

According to information received quoting sources, out of the total 13 FPIs that came under investigation, the terms and conditions of the funds which had applied for settlement to resolve the matter did not meet the standards and transparency norms set by the regulator. These foreign funds were avoiding sharing complete and clear information regarding their ultimate beneficial owners with the regulator. SEBI has made it clear that no agreement will be accepted without complete information and transparency.

Now what next?

After the settlement applications in this case were rejected, SEBI is now preparing to issue 'show cause notice' to these FPIs. Also, if found guilty of alleged violation of rules, heavy fines can be imposed on these funds or they may also be banned from doing business in the Indian market. Apart from this, this decision of SEBI gives a message that attempts to hide the real owners of foreign investments in the Indian stock market will not be tolerated at all.

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