Kerala Opposition Leader Pinarayi Vijayan Questions Adani Vizhinjam Port Stake Sale, Seeks SEBI Scrutiny
Leader of the Opposition in the Kerala Assembly, Pinarayi Vijayan, has written to the Securities and Exchange Board of India (SEBI) requesting an examination of whether the disclosure made by Adani Ports and Special Economic Zone Limited (APSEZ) regarding a share purchase and subscription agreement concerning Adani Vizhinjam Port Private Limited (AVPPL) complies with contractual and regulatory requirements. In his letter dated July 3, 2026, Vijayan stated that the proposed transaction, if allowed to proceed, would be gravely detrimental to public interest, particularly for the people of Kerala.
Vijayan, a former Chief Minister, cited the Concession Agreement signed on August 17, 2015, between the Kerala government and AVPPL for the development and operation of the Vizhinjam International Seaport. According to Clause 5.3.1 of the agreement, the concessionaire shall not undertake or permit any Change in Ownership without the prior approval of the Authority, which is the Kerala government. Clause 5.3.2(a) specifies that a transfer of more than 25% equity constitutes a Change in Ownership, requiring prior approval from a national security and public interest perspective. The proposed transfer of a 49% interest in AVPPL meets this threshold, Vijayan argued.
The Kerala government clarified in the Assembly on July 1, 2026, that it had received no communication from AVPPL or APSEZ regarding this transaction before its public disclosure. The government also stated its intention to examine the transaction on grounds including national security, the port's common-user character, fair competition, and future development prospects.
Vijayan further contended that the proposed deal violates Regulation 30 read with Schedule III and the SEBI Master Circular, as well as the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. According to these regulations, a listed entity must disclose the sale or disposal of an interest in a subsidiary, including the expected date of completion and the approvals on which completion is conditional. However, APSEZ's disclosure only states that the transaction is 'subject to customary approvals, including regulatory ones.' Vijayan argued that such a proposal could only be made after receiving prior approval from the Authority (the Kerala government), which was not obtained or even applied for before the disclosure to the National Stock Exchange and Bombay Stock Exchange.
The disclosure does not identify that a specific, binding contractual condition exists—the prior approval of the Kerala government under Clause 5.3 of the Concession Agreement—nor does it disclose whether a request for such approval had been made. Vijayan stated that the mere mention of 'customary approvals' falls short of the standard of adequate, accurate, explicit, and fair disclosure required by Regulation 30 and Schedule III. He emphasized that the approval in question is not a routine regulatory formality but the consent of the Authority that grants and can terminate the concession on which AVPPL's business depends. Vijayan requested SEBI to examine whether the disclosure conforms to these requirements.
