Hindenburg showed the report against Adani Group to Mark Kingdon before publishing it, claims SEBI
Hindenburg: SEBI accused Hindenburg of wrongly profiting by short-selling Adani Group shares using 'non-public' and 'misleading' information.
According to market regulator SEBI, US short-seller Hindenburg Research shared its report against the Adani Group with New York-based hedge fund manager Mark Kingdon about two months before publishing it. And made a profit from the deal to share the losses caused by the volatility in the share price.
The Securities and Exchange Board of India (SEBI), in its 46-page show cause notice sent to Hindenburg, explained how US short sellers, a New York hedge fund, and a broker associated with Kotak Mahindra Bank profited from the fall in the market value of 10 listed firms of the Adani Group by more than $150 billion after the publication of the report.
It is alleged that Hindenburg made unfair profits from the short-selling of Adani Group shares with the help of 'non-public' and 'misleading' information. Hindenburg Research, which publicly released a copy of the SEBI notice today, said in its reply, "The show cause notice can only be seen as a thinly veiled attempt to silence and intimidate those who expose corruption and fraud committed by the most powerful persons in India.". Hindenburg alleged that the medium through which it had hedged its bets against Adani Enterprises Limited, the flagship firm of Adani Group, was Kotak Mahindra (International) Limited—a Mauritius-based wing of Kotak Mahindra Bank Limited.
The fund of Kotak Mahindra (International) Limited had placed bets against Adani Enterprises Limited on behalf of its client Kingdon Capital Management. The SEBI notice has excerpts of chats between an employee of the hedge fund and KMIL traders for selling futures contracts in AEL. SEBI had informed a Supreme Court-appointed panel last year that it was probing 13 opaque entities that hold 14 percent to 20 percent stake in Adani Group shares.
Not only Hindenburg, but Kotak Mahindra International Ltd, Kingdon, and even the founder of Hindenburg, Nathan Anderson, have been issued notices by SEBI. Senior advocate Mahesh Jethmalani claimed links of Kingdon with China in a social media post shared on the platform X. According to him, Kingdon is married to the Chinese spy Anla Cheng.
