Hindenburg Gave Adani Report To Client 2 Months Before Publishing: SEBI

The capital markets regulator Securities and Exchange Board of India (SEBI), in its 46-page show cause notice to Hindenburg Research, has detailed how the US short seller shared an advance copy of its critical report on the Adani Group with New York-based hedge fund manager Mark Kingdon two months before its public release.

The show cause notice alleged that Hindenburg, Mr Kingdon's hedge fund, and a broker associated with Kotak Mahindra Bank benefited from the over $150 billion decline in the market value of Adani Group's 10 listed firms after the publication of the report.

The markets regulator has accused Hindenburg of making "unfair" profits through collusion, using non-public and misleading information to induce panic selling in Adani Group stocks.

Last week, senior lawyer Mahesh Jethmalani alleged that a businessman with Chinese links had commissioned the report by Hindenburg Research which led to shares of Adani Group companies taking a hit.

In a post on social media platform X, Mr Jethmalani claimed that Kingdon, the American businessman behind Kingdon Capital Management LLC, had hired Hindenburg to prepare a report on the Adani Group.

The SEBI issued a show cause notice to Hindenburg Research, Nathan Anderson and the entities of Mauritius-based foreign portfolio investor Mr Kingdon for trading violations in the shares of Adani Enterprises Ltd, leading up to the Hindenburg report and thereafter.

An investigation by the markets regulator exposed that Kotak Mahindra and Hindenburg conspired to take short positions in Adani shares.

Kotak Mahindra (International) Ltd, a unit of Kotak Mahindra Bank, has said Hindenburg was never a client of the group's K-India Opportunities Fund (KIOF) and Kotak Mahindra International Ltd (KMIL).

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