As per regulation 155 of SEBI ICDR Regulations company cannot bring the FPO if investigation by sebi is ongoing or show cause notice has been served and pending
Backstory,In July-21 Govt in parliament responded to questions raised by @MahuaMoitra and stated that SEBI is investigating Adani Group
Same day, Adani group clarified that there is no investigation ongoing by Sebi, though theybmentioned that Sebi has sought some "specific information" (more details on this later)
A month after parliamentary response, Sebi kept Adani Wilmar IPO "in abeyance" without giving further details.
Most probably due to Sebi ongoing investigation which Govt mentioned
Adani Group in RHP documents (Adani Wilmar IPO and Adani Enterprises IPO) didn't disclose about any such investigation which govt mentioned
But stated that Sebi sought some information in Nov-20 and it responded but no show cause notice or further communication issued
Also interesting to note is how the description of "specific information" sought by Investigation dept of Sebi has changed in both (Adani Wilmar vs Adani Ent) has changed
Pic 1 : Adani Ent
Pic 2 : Adani Wimar (highlighted in red the missing information in FPO doc)
To give perspective on timing,
Sebi sought information from Adani Group in Nov-20 (before @suchetadalal 's tweet on Adani Group) while Govt response came after her tweet
Fast forward to 2023, @HindenburgRes says SEBI investigation is ongoing and not concluded as of Sept-22
@Reuters@jaysh88 also mentioned that Sebi investigation is ongoing
Summarizing there are evidences that investigation is ongoing but Adani group has denied it.
If investigation is ongoing Adani Enterprises is no eligible for Fast Track FPO route
Sebi needs to clarify
1. Whether investigation is ongoing or not? 2. What actions Sebi took after taking information from Adani in Nov-20? 3. Clarify on scope & person involved in investigation mentioned by Govt 4. Whether there investigation is on Adani or its FPIs?
Cont
Cont 5. Whether Adani Enterprises suffice the pre conditions of Fast track FPO as mentioned in reg 155 of ICDR?
Interestingly fast track route of FPO doesn't need Sebi nod.
Fundamental Problem - Why it's a Ponzi Scheme for VEDL Shareholders
To service its own debt burden, VRL is systematically draining VEDL, forcing the operating company to take on ever-increasing leverage and deplete its cash reserves. This looting erodes the fundamental value of VEDL, which constitutes the primary collateral for VRL's own creditors.
VRL forces VEDL to declare disproportionately large dividends, which are funded not by free cash flow but by taking on more debt and draining its balance sheet
VEDL has incurred a $5.6b free cash flow shortfall against dividends paid in the last 3 years..
This arrangement has pushed the entire group to the brink of insolvency, propped up only by a continuous cycle of new debt, accounting tricks, and the deferral of massive, undisclosed liabilities.
Major allegations/red flags:
Bait and Switch Funding Model - Raise fresh capital to service debt in the name of new projects like Semiconductor
Irreconcilable Interest Expenses
Inflated asset values of non-operating subsidiaries exceed the value of debt
CAPEX Fraud - Expenses across operating subsidiaries are systematically capitalized, artificially inflating profits and asset values. This is a material misrepresentation.
Off-Balance Sheet Items – Billions of dollars of disputed expenses are kept off-balance sheet and undisclosed in financial reports.
Governance failures across management and auditors, including inappropriate auditor choices
Listed at ₹3000, now trading at a deep discount,
yet no buying interest.
A Thread 🧵
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#CorporateGovernance #redflag
Learning: "Not every special situation is worth looking."
I request you to read all tweets to understand the full story of value destruction and how we can learn from the same.
The story began with big restructuring at Raymond Ltd. In FY23, they sold their FMCG business to Godrej Consumer for ₹2825 Crs, mainly to cut debt. Net debt significantly reduced.
This sale was supposed to leave a net surplus of ~₹1500 Crs on the balance sheet for growth capital after clearing debt.
Let's start with what SEBI found : Gensol actually submitted false documents about debt servicing to Credit Rating agencies concerning two lenders (IREDA and PFC).
Interesting charts, data points and investing perspective
A data-backed thread 🧵
Favourite: There is always a reason to sell
Whenever such events occur, we feel it is a time to invest through mutual funds (Why not equity? Because you don't need to worry about ab konsa stock/ sector chalega)
Despite several intermittent crises, Indian Equities have gone up over the long run mirroring earnings growth