In a move that has the financial world on edge, Hindenburg Research has hinted at another major revelation concerning India. The U.S.-based short-seller, known for its explosive reports, posted a cryptic message on X (formerly Twitter) on Saturday, stating, Something big soon India. This announcement comes nearly a year after their bombshell report on the Adani Group, which led to a dramatic $86 billion drop in the market value of the conglomerates stocks and sparked a massive sell-off of its overseas bonds.Adani-Hindenburg saga: New developmentsThe Securities and Exchange Board of India (SEBI) has brought to light new information regarding the ongoing investigation into the Adani-Hindenburg affair. SEBIs findings have exposed links between Hindenburg Research and New York hedge fund manager Mark Kingdon. According to SEBI, Hindenburg provided Kingdon with an advance copy of its damning report on the Adani Group nearly two months before it was made public. This early access allowed Kingdon to profit significantly through strategic trading.Something big soon India— Hindenburg Research (@HindenburgRes) August 10, 2024SEBIs detailed 46-page show-cause notice reveals that Hindenburg and Kingdon Capital Management signed a Research Agreement in May 2021, facilitating the exchange of the draft report. The report, which accused the Adani Group of orchestrating the largest con in corporate history, led to a market value decline of over $150 billion across Adanis listed companies.Kingdons profits and Kotak Mahindra involvementSEBIs notice also sheds light on Kingdon Capitals substantial stakes in Kotak Mahindra Investments Limited (KMIL). The hedge fund reportedly transferred $43 million to establish short positions in Adani Enterprises Ltd (AEL) before the reports release, later closing these positions for a profit of $22.25 million. SEBIs findings include time-stamped communications between hedge fund employees and Kotak Mahindra traders discussing futures contracts in Adani Enterprises.In response to SEBIs allegations, Kingdon Capital defended its actions, stating that it was within its legal rights to enter into such research agreements. Kotak Mahindra Bank, meanwhile, denied any involvement or prior knowledge of Kingdons relationship with Hindenburg.Hindenburgs defense and potential legal actionsHindenburg Research has responded to SEBIs notice by criticizing the regulators approach, accusing it of trying to silence and intimidate those exposing corruption. The short-seller also pointed out that SEBIs focus on Hindenburgs activities detracts from the need to investigate the Adani Groups alleged financial misconduct.The SEBI notice could lead to legal repercussions, including financial penalties and market participation restrictions for those involved. Hindenburg has been given 21 days to respond to the allegations.
