New Delhi. US short-seller Hindenburg Research shared an advance copy of its report against the Adani Group with New York-based hedge fund manager Mark Kingdon about two months before its publication and took advantage of volatility in the shares of the group’s companies, the Securities and Exchange Board of India (SEBI) has claimed.
In its 46-page show cause notice to Hindenburg, SEBI has detailed how US short sellers, New York-based hedge funds and brokers linked to Kotak Mahindra Bank benefited from the massive $150 billion drop in the valuation of shares of the group’s 10 listed companies following the publication of the report.
In its response to SEBI’s show cause notice, Hindenburg has said that this is an attempt to “silence and intimidate those who expose corruption and fraud committed by India’s most powerful persons”. It has also revealed that the entity used to bet against Adani’s flagship company Adani Enterprises Ltd. belonged to Kotak Mahindra (International) Limited (KMIL), a Mauritius-based subsidiary of Kotak Mahindra Bank Limited.
KMIL’s fund placed the bet on Adani Enterprises Ltd for its client Kingdon’s Kingdon Capital Management.
The SEBI notice contains excerpts of a ‘chat’ between an employee of the hedge fund and traders of KMIL to sell future contracts in Adani Enterprises Ltd (AEL). Kotak Mahindra Bank has said that Kingdon never disclosed that he had any relationship with Hindenburg nor was he acting on the basis of any price-sensitive information.
SEBI had told a Supreme Court-appointed committee last year that it was investigating 13 such external ‘shadowy’ entities that had a stake between 14 per cent and 20 per cent in five publicly traded shares of the Adani Group. SEBI has sent notices not only to Hindenburg, but also to KMIL, Kingdon and Hindenburg founder Nathan Anderson. Senior advocate Mahesh Jethmalani, who has previously spoken on behalf of the Adani Group, has claimed in a post on ‘X’ that Kingdon has links with China. Kingdon is married to ‘Chinese spy’ Anla Cheng.
Jethmalani has alleged that Chinese spy Cheng, along with her husband Mark Kingdon, hired Hindenburg to prepare a research report on Adani. They used Kotak’s trading account for short selling Adani shares and earned millions of dollars through this. This led to a huge drop in the valuation of shares of Adani Group companies.