India Threatens Offshore Funds Holding Adani Shares with Penalties

India has issued a warning to two offshore funds that hold shares in the Adani Group, threatening them with penalties if they fail to comply with regulations. According to a document seen by Reuters, the funds – Albula Investment Fund and Cresta Fund – have been accused of not seeking prior approval from the Reserve Bank of India before increasing their stake in Adani companies. The Indian authorities have given the funds 30 days to explain why they shouldn’t face penalties for violating foreign exchange regulations. The Adani Group, one of India’s largest conglomerates, has been at the center of controversy in recent months, with allegations of tax evasion and environmental violations. The group’s founder, Gautam Adani, has close ties to Prime Minister Narendra Modi, leading to concerns about crony capitalism. The warning to the offshore funds holding Adani shares is seen as a move by the Indian government to crack down on foreign investors who may be flouting regulations. It remains to be seen how the funds will respond to the threat of penalties and whether this will impact their investment in the Adani Group.