Two Mauritius-based Foreign Portfolio Investors (FPIs), LTS Investment Funds and Lotus Global Investment, have petitioned the Securities Appellate Tribunal (SAT) for urgent relief from complying with Sebi’s new foreign investor norms, court filings revealed. The funds, mentioned in Hindenburg Research’s January 2023 report on the Adani Group, filed their case on August 19, 2024.
Both funds argue that SEBI directions unfairly disadvantage their investors. They claim Sebi has delayed ruling on their exemption requests and imposed additional conditions that are not applicable to other FPIs. The funds are in breach of the rule limiting investments in a single corporate group to 50%, with the funds requesting more time to comply.
LTS manages a global portfolio of $4 billion, while Lotus oversees $900 million worldwide. Their India portfolios remain unclear. The funds have asked SAT to grant them time until March 2025 to meet Sebi’s norms instead of the September 9, 2024, deadline.
LTS and Lotus claim that Sebi has not processed their exemption requests filed in March. Furthermore, they allege that Sebi changed the Standard Operating Procedure (SOP) in May, removing Mauritius-based pooled investment vehicles from the exemption list. Both funds argue that they are being held to unfair additional conditions not specified in the SOP.
Hindenburg’s report had highlighted concerns about LTS and Lotus’ concentration of investments in Adani Group companies. While LTS held nearly 98% of its India portfolio in Adani Group stocks, Lotus’ holdings were below 1%.
The funds are seeking clarity from Sebi and an extension to adjust their portfolios in line with the new rules.
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