The regulator has alleged that Hindenburg and Anderson have violated regulations under the SEBI Act, SEBI’s Prevention of Fraudulent and Unfair Trade Practices regulations, and SEBI’s Code of Conduct for Research Analyst regulations; FPI Kingdon has allegedly violated the SEBI Act, SEBI’s Prevention of Fraudulent and Unfair Trade Practices regulations, and SEBI’s Code of Conduct for Foreign Portfolio Investors. Hindenburg Research LLC, and its sole beneficial owner, Nathan Anderson, along with Mark Kingdon, who is the Ultimate Beneficial Owner of Mauritius-based entities, have been issued a show cause notice by SEBI for trading violations in the scrip of Adani Enterprises, and after that.

“Instead, it simply named the K-India Opportunities fund and masked the ‘Kotak’ name with the acronym ‘KMIL'”

The lender’s stock dropped as much as 2.2%, reaching its lowest level since June 25, but it later pared part of its losses and was trading 2.1% lower at ₹ 1,769.50 a share as of 11:38 a.m. In contrast, the NSE Nifty 50 had an increase of 0.16%. You can only listen to the newest music on JioSaavn.com. The stock has dropped 4.8% over the past 12 months and 7.4% so far this year. The day’s total traded volume was 0.37 times higher than the 30-day average. 53.59 was the relative strength index. According to Bloomberg statistics, of the 42 analysts following the firm, 28 have a “buy” rating, nine indicate “hold,” and five suggest “sell.” An increase of 5.8% is implied by the average 12-month analysts’ consensus price objective.

Hindenburg responds to SEBI on Adani show cause notice: 10 key points of defence

“We suspect SEBI’s lack of mention of Kotak or any other Kotak board member may be meant to protect yet another powerful Indian businessman from the prospect of scrutiny, a role SEBI seems to embrace,” Hindenburg said. Sebi’s 46-page show cause notice was sent to Hindenburg on June 27, which the short-seller characterized as ‘attempted intimidation’. Hindenburg said it was short on Adani shares ‘through a deal with an investor partner who was indirectly short Adani derivatives through a non-Indian, offshore fund structure.’ Hindenburg had last year published a report alleging Adani Group was “engaged in a brazen stock manipulation and accounting fraud scheme over decades.” The report led to a massive $150 billion rout in Adani Group Adani Group stocks.
Adani Group was allegedly “engaged in a brazen stock manipulation and accounting fraud scheme over decades,” according to a study released by Hindenburg last year. The report caused the Adani Group’s stock to plunge by a staggering $150 billion. Open up a world of advantages! Everything you need is right here, only a click away, including intelligent newsletters, real-time stock tracking, breaking news, and a customizable newsfeed!

In response, Hindenburg claimed that Kotak Mahindra Investment Ltd

According to SEBI, in November 2022, Kingdon received a draft of the report from the US-based short seller. “Substantial similarity” existed between the draft and the final report. Before signing a research services deal with Hindenburg, according to SEBI, Kingdon allegedly sought legal approval. As a result, SEBI allegedly obtained the draft report, which was used to make investments before the report was made public. By the terms of the research agreement, Kingdon Capital committed to sharing 25% of the profit rather than 30% as stated in the study report. The expense, arrangement, and duration involved in establishing the KIOF trading account and short-selling shares of Adani Enterprises in India were the reasons for the decrease in profit shares. Once the KIOF account was established and the draft report was received, Kingdon’s Master Fund deposited $40 million to the KIOF trading account and converted $18 million in Indian rupees to the margin account for trading. On January 10, the trading account was opened to accumulate short positions in the Adani Enterprises Futures.
By January 20, the fund had taken on short positions totaling 850,000 shares, making up as much as 7.01% of the Open Interest position before the report was released. Before the report was released, the fund continued to roll over the bets into February futures. It then squared off the positions between February 1 and February 22 to earn a profit of Rs 183.24 crore. Kingdon paid $2.7 million and $1.38 million to Hindenburg on March 31, 2023, and June 1, 2023, respectively, by invoices raised by the US short seller, despite being obligated to share $5.52 million in profit with Hindenburg. While it kept its stake in K India Opportunities Fund, it held back $1.38 million. Once the funds were taken, the remaining amount was to be paid.