Stake sale deal in Vizhinjam port detrimental to public interest, says Kerala Leader of the Opposition Pinarayi Vijayan

Requesting the Securities and Exchange Board of India (SEBI) to examine whether the disclosure made by Adani Ports and Special Economic Zone Limited (APSEZ) in relation to the share purchase and subscription agreement concerning Adani Vizhinjam Port Private Limited (AVPPL) conforms to contractual and regulatory requirements, Leader of the Opposition in Kerala Assembly Pinarayi Vijayan has said that the proposed transaction, if allowed to go through, will be gravely detrimental to public interest in general and particularly to the people of Kerala.

In the letter addressed to the SEBI chairperson on July 3, 2026, the former Chief Minister stated that under the Concession Agreement signed by the Kerala government and the AVPPL, the concessionaire for the development and operation of the Vizhinjam International Seaport, dated August 17, 2015, the concessionaire, as per Clause 5.3.1 of the agreement, shall not undertake or permit any Change in Ownership, except with the prior approval of the ‘Authority’ (Kerala government).

Further, Clause 5.3.2(a) of the agreement makes it clear that the transfer of more than 25% equity will constitute a ‘Change in Ownership’ requiring the prior approval of the ‘Authority’ from a national security and public interest perspective. The decision of the ‘Authority’ on this behalf is final, conclusive, and binding on the concessionaire. The proposed transfer of a 49% interest in the AVPPL squarely meets this threshold, he said.

No communication to govt.

The Kerala government, in turn, clarified in the Assembly on July 1, 2026 that it had received no communication of any kind from the AVPPL or the APSEZ regarding this transaction prior to its public disclosure. The State government also proposed to examine the transaction on grounds, including national security, the port’s common-user character, fair competition, and the prospects for the future development of the port.

Mr. Vijayan also contended that the proposed deal is also a violation of Regulation 30 read with Schedule III and the SEBI Master Circular, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements (LODR)) Regulations, 2015. As per the LODR Regulations, a listed entity is required to disclose the sale or disposal of an interest in a subsidiary and state, among other particulars, the expected date of completion of the transaction and the approvals on which such completion is conditional.

However, the APSEZ’s disclosure only states that the transaction is “subject to customary approvals, including regulatory ones.” In fact, such a proposal could be made only after receiving the prior approval of the Authority (the Government of Kerala), which was not obtained or even applied for before making the disclosure to the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

‘Contractual condition not disclosed’

Further, the disclosure does not identify that a specific, named, and binding contractual condition exists—the prior approval of the Government of Kerala under Clause 5.3 of the Concession Agreement—nor does it disclose that, as of the date of writing the letter, whether a request for such approval had been made to the Government of Kerala.

The mere mention of “customary approvals, including regulatory ones” in the disclosure falls short of the standard of adequate, accurate, explicit, and fair disclosure that Regulation 30 and Schedule III are intended to secure. The approval in question is not a routine regulatory formality but the consent of the very ‘Authority’ that grants and can, in appropriate circumstances, terminate the concession on which the AVPPL’s entire business depends on. It is against this backdrop that SEBI is requested to examine whether the disclosure conforms to these requirements.