Kannur (Kerala): Leader of the Opposition Pinarayi Vijayan on Saturday said he has written to the SEBI and the stock exchanges seeking intervention into the Adani Group's proposed transfer of a 49 per cent stake in the Vizhinjam port project, alleging that the move violated the concession agreement with the Kerala government.
Recently, Adani Ports and Special Economic Zone (APSEZ) announced that Mediterranean Shipping Company (MSC) would acquire a 49 per cent stake in Adani Vizhinjam Port Private Limited (AVPPL) for about USD 1.4 billion.
Also read: Adani Ports says MSC’s terminal arm TiL will invest $1.4 billion for 49% stake in Vizhinjam Port
Addressing reporters, Vijayan alleged that the proposed transaction involved not only a possible breach of the concession agreement but also issues relating to public interest and national security.
"When all aspects of the matter are examined, it appears that there was a well-planned and premeditated commercial strategy behind these developments," he alleged.
According to Vijayan, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 require transparent disclosure of all material information relating to such transactions.
"However, the facts suggest that these developments were not communicated to SEBI and the concerned authorities in a transparent manner at the appropriate stage. Taking these factors into account, I sent a letter to SEBI as well as to the stock exchange authorities, seeking their intervention in the matter," he said.
The former chief minister alleged that while the Adani Group had informed the Securities and Exchange Board of India (SEBI) about the proposed share transfer, it had neither informed the Kerala government nor obtained its prior approval as required under the concession agreement.
Referring to Clause 5.3.1 of the agreement, Vijayan said any transfer of ownership or transfer of more than 25 per cent of the shareholding requires prior approval from the state government.
Also read: Pinarayi Vijayan tears into Adani group over Vizhinjam port share transfer without govt nod
"This is not merely a technical issue. The state government has the right to examine the necessity and implications of such a transfer. The question is how the Adani Group is proceeding with this move without following the prescribed procedure," he said.
Vijayan said his letter requested SEBI to seek an explanation from the Adani Group regarding the proposed share transfer and take appropriate action if any violations were found.
He said reports regarding the proposed transfer surfaced on June 30, while the company had reportedly informed SEBI about the proposal a day earlier.
Vijayan said he had raised the issue in the Kerala Assembly on July 1, when Chief Minister VD Satheesan informed the House that the state government had not received any application seeking approval for the proposed transaction.
Alleging that the state government had failed to respond with the urgency the issue warranted, Vijayan said it had not even taken the basic step of approaching SEBI.
"The government has not even fulfilled that basic responsibility. There is no sense of urgency and it does not appear willing to raise the issue before SEBI. A certain degree of undue leniency is evident in the handling of the matter," he alleged.
Describing Vizhinjam as Kerala's flagship infrastructure project built with substantial public funds, Vijayan said the government must safeguard the interests of the people.
"The money invested in the project belongs to the people of Kerala. The key concern is whether the interests of the people are being adequately protected," he said.
Vijayan also sought clarification from Chief Minister Satheesan on whether the government had received a letter from the Adani Group regarding the proposed share transfer.
He said that the Ports Department, the Law Department and the Finance Department all come into the picture in a matter like this.
"Since all these portfolios are with the Chief Minister, the serious question is how the Adani Group gained the confidence to proceed with such a move without informing the government in advance. It is here that grave suspicions arise," he alleged.
He noted that while the Chief Minister had told the Assembly that no such communication had been received, subsequent media reports suggested that the company had written to the Chief Minister and the state government.
"The Chief Minister should clarify whether the government received that letter. Otherwise, people may suspect there was a deal between the Adani Group and the state government. The government should clear the air on the matter immediately," he alleged.
Questioning whether the proposed transaction effectively amounted to a change in ownership, Vijayan said Clause 5.3 of the concession agreement clearly stipulates that such a move cannot be undertaken without prior approval from the state government.
Vijayan also referred to Congress leader Rahul Gandhi's past criticism of the Adani Group and Prime Minister Narendra Modi, saying the issue of strategic infrastructure projects being handed over to the business firm had been raised repeatedly by the Congress leader both inside and outside Parliament.
He also cited remarks by Congress general secretary KC Venugopal, who had earlier alleged that the Adani Group enjoyed undue influence in BJP-ruled states.
Clarifying that his objection was not directed at MSC itself, Vijayan said the global shipping major was among the world's largest shipping companies and has been operating at Vizhinjam.
"However, acquisition of a significant ownership stake by such a company could gradually lead to a monopolistic structure at the port, discouraging competition and affecting its long-term development," he said.
