The Securities and Exchange Board of India on Friday told the Supreme Court that it is tracking owners of 12 Foreign Portfolio Investors who are public shareholders in Adani Group companies, reported PTI.

Foreign Portfolio Investors are a component of the non-promoters or public shareholders’ grouping in listed companies. The investigation is being conducted to find if Adani group has violated the Securities Contract (Regulation) Act, which stipulates minimum 25% public shareholding in listed companies.

In March, the Supreme Court had asked the market regulator to conduct an inquiry after American firm Hindenburg Research in a report on January 24 alleged that billionaire Gautam Adani’s group was pulling off the “largest con in corporate history”.

The report claimed that the conglomerate has been involved in accounting fraud, improper use of tax havens and money-laundering. The Adani Group rejected these allegations but the report had still pummeled the stocks of the conglomerate’s listed companies.

On Friday, the market regulator informed the court about its investigation covering 13 overseas entities comprising 12 Foreign Portfolio Investors and one foreign entity.

They were classified as public shareholders of the Adani group companies but Hindenburg Research had termed some of them close associates of or run by Vinod Adani, the elder brother of group chairman Gautam Adani.

“As many of the entities linked to these foreign investors are located in tax haven jurisdictions, establishing the economic interest shareholders of the 12 FPIs remains a challenge… efforts are still being made to gather details from five foreign jurisdictions,” the market regulator told the top court.

Tax havens allow registration of foreign entities with more relaxed rules on processing the identification and verification of a client. Tax haven companies deploy various means to block queries seeking information on beneficial ownership or economic interest, making it difficult for regulators to conduct an investigation.

On Friday, the Securities and Exchange Board of India also told the Supreme Court that it has prepared an interim report on trading in Adani group stocks before and after the release of the Hindenburg report, reported PTI. The regulator was investigating trading patterns or short position of some entities in the Adani Group.

Short positions are “created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price”, says Investopedia.

The regulator is investigating whether these short positions were unusual around the time of the release of the Hindenburg report. It is also actively pursuing and waiting for information from external agencies and entities, reported PTI. The report was approved on August 24.

Also read: Who is Vinod Adani, the mysterious elder brother at the heart of the Adani crisis?