Kerala LoP Vijayan Pushes SEBI to Halt Adani Vizhinjam Port Stake Transfer Over Alleged Concession Breach

Kerala LoP Vijayan Pushes SEBI to Halt Adani Vizhinjam Port Stake Transfer Over Alleged Concession Breach​

Stakes Raised Over Proposed Foreign Takeover of Vizhinjam Port​

Kerala's Leader of the Opposition (LoP), Pinarayi Vijayan, has filed a formal complaint with SEBI and stock exchanges over the proposed sale of a 49 per cent stake in Adani Vizhinjam Port Private Limited (AVPPL). This action stems from allegations that the transaction violates the terms of the concession agreement held by the Kerala government.

Adani Ports and Special Economic Zone (APSEZ) recently announced that Mediterranean Shipping Company (MSC) would acquire this significant 49 per cent stake for approximately USD 1.4 billion. Vijayan alleges that the proposed move represents not only a possible breach but also raises serious concerns regarding public interest and national security implications.

Alleged Violation of Concession Agreement Mandates​

Vijayan stated that the proposal suggests a "well-planned and premeditated commercial strategy" behind these developments. He highlighted that SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 demand transparent disclosure of all material information related to such transactions.

The core allegation is that while Adani Group informed SEBI about the proposed share transfer, they failed to inform the Kerala government or secure its prior approval as mandated by the concession agreement. Clause 5.3.1 of the agreement clearly stipulates that any transfer exceeding 25 per cent requires state governmental approval.

State Government’s Right to Scrutinize Transaction​

According to Vijayan, "This is not merely a technical issue." The Kerala government maintains the legal right to examine the necessity and implications of such a major ownership transfer. He questioned how Adani Group could be proceeding with this transaction without adhering to the prescribed state procedure.

Vijayan informed that his letter urged SEBI to seek an explanation from the Adani Group regarding the proposed share transfer and take necessary action should any violations be found. Reports of the intended takeover first surfaced on June 30, although the company reportedly notified SEBI a day earlier.

Ministerial Responsibility and Lack of Urgency​

Vijayan detailed that upon raising the issue in the Kerala Assembly on July 1, Chief Minister V.D. Satheesan confirmed that the state government had not received any application seeking approval for the proposed transaction. The LoP criticized the government for failing to respond with due urgency.

He alleged a "sense of undue leniency" in handling the matter, stating that the state government has not even fulfilled the basic responsibility of approaching SEBI regarding the transfer. This led Vijayan to demand clarification from CM Satheesan on whether the formal application was ever received by the state.

Implications for Flagship Infrastructure Project​

Describing Vizhinjam as Kerala's flagship infrastructure project backed by substantial public funds, Vijayan emphasized that the government must safeguard the interests of its citizens. He stated clearly: "The money invested in the project belongs to the people of Kerala."

The chief concern remains whether the financial interests of the local populace are being adequately protected during this high-value transaction. Vijayan also stressed that the Ports Department, Law Department, and Finance Department must all be involved given their portfolios.

Monopoly Concerns and Strategic Oversight​

Vijayan questioned how Adani Group gained confidence to proceed with such a move without informing the state government in advance, suggesting "grave suspicions" arising from this omission. He pointed out that while media reports suggested communication occurred, CM Satheesan had stated no application was received.

He noted that acquisition of a significant ownership stake by MSC could gradually lead to a monopolistic structure at the port. This development could potentially discourage competition and affect the long-term development trajectory of the critical infrastructure asset.