Hindenburg Research, the US-based short seller known for its controversial report on the Adani Group in January 2023, has hinted at another impending revelation involving an Indian company. On X (formerly Twitter), the firm cryptically stated, “Something big soon India,” but provided no further details.
The previous Hindenburg report on the Adani Group, released just before a major share sale by Adani Enterprises, had a dramatic impact, erasing $86 billion in the conglomerate’s market value. This led to a significant sell-off of Adani’s bonds overseas and placed the group under intense scrutiny. However, the objectivity and fairness of the Hindenburg report have been questioned, with accusations that it was designed to dismantle and disrupt the Indian economy.
In a recent development, Hindenburg was again in the spotlight when it was revealed in June that India’s Securities and Exchange Board of India (Sebi) issued a notice against the firm, alleging violations of Indian regulations. The notice specifically mentioned Kotak Bank, marking the first time Hindenburg explicitly identified the Indian banking giant in its reports.
Hindenburg responded to Sebi’s notice, calling it “nonsense” and accusing the regulator of trying to silence those who expose corruption in India. The short seller pointed out that Sebi’s notice conspicuously avoided naming Kotak Bank, despite its alleged involvement in offshore fund structures related to the Adani Group. Hindenburg suggested that Sebi might be protecting powerful Indian businessmen from scrutiny.
The Sebi notice also disclosed connections between Hindenburg Research and New York hedge fund manager Mark Kingdon. It was revealed that Kingdon Capital, which held significant investments in Kotak Mahindra Investments Limited (KMIL), received an advance copy of Hindenburg’s Adani report. This allowed the hedge fund to profit significantly by taking short positions in Adani Enterprises before the report’s release, yielding a profit of $22.25 million.
Kotak Mahindra Bank denied any involvement or knowledge of Kingdon’s activities, while Kingdon Capital defended its right to engage in research agreements that allow the use of reports before they are made public.
As Hindenburg teases its next target, the financial world is once again on high alert, waiting to see which Indian company might be in the crosshairs of the controversial short seller.
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