The Securities and Exchange Board of India (SEBI) launched an investigation last year into offshore funds named in the January 2023 Hindenburg Research report. The regulator sent show‑cause notices to about a dozen funds, alleging breaches of disclosure rules and limits on foreign portfolio investors.
The five affected funds – LTS Investment Fund Ltd, Cresta Fund Ltd, Asia Investment Corporation (Mauritius) Ltd, APMS Investment Fund Ltd and Albula Investment Fund Ltd – had earlier filed appeals with the Securities Appellate Tribunal (SAT). They challenged the initiation of adjudication proceedings, claiming the adjudicating officer had not provided a proper opinion under Regulation 4(3) of the Adjudication Rules.
SEBI objected that an opinion had already been supplied by the adjudication officer and that the funds were attempting to stall the inquiry. The regulator argued that the officer had considered the funds’ replies before deciding to proceed, making the appeal maintainable but not viable.
In response, the funds asked the tribunal to allow them to amend their appeals. After reviewing the objections, the tribunal permitted the withdrawal of the original petitions and granted leave to file fresh appeals that focus on a narrower legal issue.
Counsel for the funds said, “There were so many consequential amendments, so it’s better to file a fresh appeal.” They added that the new appeal would be filed within two days.
The SAT’s order noted that the appellant wished to amend the appeal and therefore sought leave to withdraw the current case, “seeking liberty to present a fresh appeal incorporating the necessary amendments.”
With the withdrawal cleared, the five offshore funds plan to re‑file their challenges. The legal battle is expected to continue in a modified form, with the tribunal reviewing the newly submitted appeals that concentrate on specific aspects of SEBI’s adjudication process.