New Delhi: US short-seller Hindenburg Research had shared an advance copy of its report against the Adani group with two other entities around two months before publishing it, according to market regulator Securities and Exchange Board of India (SEBI). One of the companies with whom the report was shared was – New York-based hedge fund manager Mark Kingdon.
The SEBI also claimed that the company gained profit from a deal to share spoils from share price movement. The market regulator issued a 46-page show cause notice to Hindenburg Research. In the notice, the SEBI mentioned how the US short seller, the New York hedge fund and a broker linked to Kotak Mahindra Bank benefited after share prices of Adani Group’s 10 listed companies plunged. Notably, the total value of the drop in share prices was estimated at over USD 150 billion post-publication of the report.
The SEBI charged Hindenburg with making “unfair” profits by spreading misleading information. The SEBI’s notice was made public by Hindenburg. The US short seller, in its response to the showcause notice, claimed that the vehicle used to bet against Adani Group’s flagship firm Adani Enterprises Ltd belonged to Kotak Mahindra (International) Ltd (KMIL). The KMIL is a Mauritius-based subsidiary of Kotak Mahindra Bank Ltd.
The Kotak Mahindra Bank’s subsidiary allegedly placed bets on Adani Enterprises Ltd for its client Kingdon Capital Management, claimed the SEBI. Meanwhile, the bank claimed that Kingdon “never disclosed that they had any relationship with Hindenburg nor that they were acting on the basis of any price-sensitive information”. The SEBI had also sent notices to the KMIL, Kingdon and Hindenburg founder Nathan Anderson.
Earlier this week, senior lawyer Mahesh Jethmalani had claimed that Kingdon had a Chinese link. “Accomplished Chinese spy Anla Cheng, who along with her husband Mark Kingdon, hired Hindenburg for a research report on Adani, engaged the services of Kotak to facilitate a trading account to short sell Adani shares; made millions of dollars from their short selling; eroded Adani market cap enormously,” he had alleged in a post on X.
Last year, the SEBI told a Supreme Court-appointed panel that it was probing 13 opaque offshore entities that held between 14 per cent and 20 per cent across five publicly traded stocks of the Adani Group.
(With inputs from PTI)
