Adani-NSDL confusion nears resolution

The confusion over the alleged freezing of the demat accounts of three big Mauritius-based investors in Adani group companies edged closer to being resolved, with National Securities Depository Ltd clarifying that the three accounts were frozen five years ago by a SEBI order.

Adani Group divulged a clarification it received from NSDL, the agency which facilitates demat accounts for most investors in India. In the letter written by NSDL to Adani, the depository clearly said that the particular accounts used for investing in Adani Group companies are not frozen. The frozen accounts are related, said NSDL, to an order passed by markets regulator SEBI five years ago.

“The below demat accounts are in Suspended for Debit status in terms of SEBI order no WTM/PS/58/IVD/JUN/2016 dated June 16, 2016,” NSDL wrote to Adani companies, according to Adani Group. The letter from NSDL then goes on to mention the account numbers as well as the operators of the accounts as Cresta Fund Ltd, Albula Investment Fund Ltd and APMS Investment Fund Ltd.

NSDL then went on to clarify that the demat accounts operated by the above three Mauritius-based entities for buying and selling Adani Group companies’ shares are not frozen or suspended.

“The current status of the Demat accounts of the shareholders is available in the DPM (SHR) system. As may be verified from the said system, the status of Demat accounts mentioned in your trail email are held in Active status in NSDL system,” it noted.

In short, the confusion seems to have been related to an apparent misreading of the status published by NSDL on its website where it seems to have mentioned the name of the three Mauritius-based entities.

However, from the clarifications, it seems apparent that the entities hold more than one trading account with NSDL, and the account used for purchasing and holding Adani Group companies’ shares have not been frozen.

The original report by Economic Times that NSDL had frozen the accounts of all three investors had led to a massive sell-off in the shares of Adani Group companies, including Adani Power, Adani Enterprises, Adani Ports & Special Economic Zone Ltd, Adani Total Gas and Adani Transmission Ltd.

Most of these stocks closed down 5% on Monday.