Hindenburg shared Adani report with fund manager
New Delhi, July 7: US short-seller Hindenburg Research had shared an advance copy of its damning report against Adani group with New Yorkbased hedge fund manager Mark Kingdon about two months before publishing it and profited from a deal to share spoils from share price movement, according to market regulator Sebi.
The Securities and Exchange Board of India (Sebi), in its 46-page show cause notice to Hindenburg, detailed how the US short seller, the New York hedge fund and a broker tied to Kotak Mahindra Bank benefited from the over $150 billion routs in the market value of Adani group’s 10 listed firms post-publication of the report.
Sebi charged Hindenburg of making unfair profits from collusion to use non-public and misleading information and induce panic selling in Adani Group stocks.
Hindenburg, which made public the Sebi notice, in its response, has described the show cause as an attempt to “silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India” and revealed that the vehicle used to bet against Adani’s flagship
SEBI CHARGED Hindenburg of making unfair profits from collusion to use non-public and misleading information and induce panic selling in Adani Group stocks.
firm Adani Enterprises belonged to Kotak Mahindra International Ltd (KMIL), a Mauritius-based subsidiary of Kotak Mahindra Bank. KMIL’s fund placed bets on Adani Enterprises Ltd for its client Kingdon’s Kingdon Capital Management.
Sebi notice includes extracts of time-stamped chats between an employee of the hedge fund and KMIL traders for selling future contracts in AEL.
Kotak Mahindra Bank has stated that Kingdon “never disclosed that they had any relationship with Hindenburg nor that they were acting on the basis of any price-sensitive information”.
Sebi -- which last year told a Supreme Courtappointed panel that it was investigating 13 opaque offshore entities of the Adani group -- has sent notices not just to Hindenburg but also to KMIL, Kingdon and Hindenburg founder Nathan Anderson.