By – Aditi Gupta
Hindenburg was charged by SEBI of short selling Adani Group shares in order to profit unfairly by using “non-public” and “misleading” information.
Market oversight Sebi claims that US short-seller Hindenburg Research shared its report critical of the Adani Group with New York-based hedge fund manager Mark Kingdon roughly two months prior to publishing it. Kingdon profited from the deal by splitting the losses caused by the share price swings.
In a 46-page show cause notice to Hindenburg, SEBI provided details on how US short sellers, a New York hedge fund, and a broker connected to Kotak Mahindra Bank made money off of the $150 billion decline in the market value of ten Adani Group listed enterprises following the release of the report.
For Kingdon Capital Management, a customer of Kotak Mahindra (International) Limited, the fund made wagers on Adani Enterprises Limited. Excerpts from discussions between KMIL dealers and a hedge fund employee about selling futures contracts in AEL are included in the SEBI notice. Last year, SEBI informed a panel created by the Supreme Court that it was conducting investigations into 13 opaque firms that owned 14% to 20% of the shares in Adani Group.
Not only has SEBI sent letters to Hindenburg, but also to Kingdon, Kotak Mahindra International Limited, and Nathan Anderson, the founder of Hindenburg. In a statement uploaded on messaging platform X, senior attorney Mahesh Jethmalani asserted that Kingdon has relations to China. The ‘Chinese spy’ Anla Cheng is Kingdon’s wife, he claimed.