Hindenburg Receives 'Show Cause' Letter from SEBI Over Suspected Violations in Adani Report

Jul 2, 2024, 04:38 AM

Hindenburg Research has received a 'show cause' letter from the Securities and Exchange Board of India (SEBI) following its report on Adani Enterprises. The letter accuses Hindenburg of suspected regulatory violations and alleges that the company engaged in unfair trade practices. Hindenburg's report, published in January 2023, accused the Adani Group of fraud, leading to significant market value losses for Adani. Hindenburg made $31k from shorting Adani Group bonds and another $4.1 million in gross revenue. At the trough of its stock slump, Adani Group lost $151 billion of market value. Hindenburg has refuted SEBI's allegations, claiming that the regulator failed to address the fraud it reported. Additionally, Kotak Bank was identified as having created and overseen the offshore structure used for shorting Adani stocks. US hedge fund Kingdon Capital Management was also involved as a balance sheet provider for Hindenburg's short bet.