India’s securities regulator has accused Hindenburg of colluding with another entity to short Adani Group, sparking controversy.
Hindenburg Research has refuted claims made by India’s securities regulator regarding its alleged collaboration with a US asset manager to place a short bet against Adani Group. The Securities and Exchange Board of India (SEBI) issued a “show cause” notice to six entities, including Hindenburg, for alleged violations of regulations.
The notice alleges that Hindenburg, Kingdon Capital Management, and a fund tied to Kotak Mahindra Bank engaged in activities that breached the Prevention of Fraudulent and Unfair Trade Practices regulation. While Hindenburg dismissed the allegations as baseless, Kingdon Capital Management did not respond to requests for comment.
SEBI’s accusations are based on information received from the US Securities and Exchange Commission (SEC), suggesting a global collaboration in the shorting of Adani Group stocks. Adani, however, denied all claims made by Hindenburg last year. The allegations could result in financial penalties if proven true.
SEBI Allegations
SEBI alleges Hindenburg shared its report on Adani Group with Kingdon Capital Management before its public release, enabling them to establish short positions in Adani stocks. The involvement of Kotak Mahindra Bank in facilitating this collaboration has also raised concerns among investors.
Despite the controversy, Adani Group’s share price has rebounded, underscoring the complexity of international investing and regulatory challenges in India.