Controversial Hindenburg Firm Faces Regulatory Action Over Adani Group Report

New Delhi, Jan 16 (NationPress) The notorious short-selling entity Hindenburg Research, which is currently in the process of being dissolved according to a public letter from its founder Nate Anderson, has come under scrutiny from Indian regulatory authorities such as the Securities and Exchange Board of India (SEBI). This investigation pertains to its report targeting the Adani Group, which was subsequently dismissed by the Supreme Court.

The Adani Group has consistently refuted the claims made by Hindenburg Research, labeling them as "malicious, mischievous, and manipulative uses of publicly accessible information" aimed at reaching "pre-determined conclusions for personal gain, completely disregarding facts and legal standards."

According to the Group, "For a discredited short-seller facing multiple allegations of violating Indian securities regulations, Hindenburg's accusations are nothing more than red herrings from a desperate organization."

Last year, SEBI issued a show-cause notice to Hindenburg Research, Nate Anderson, and entities affiliated with Mauritius-based foreign portfolio investor Mark Kingdon for trading infractions related to Adani Enterprises Ltd in the lead-up to the Hindenburg Report.

The regulator contended that Hindenburg and Anderson breached regulations concerning fraudulent and unfair trading practices, as well as the ethical code for research analysts.

As per the show-cause notice, SEBI claimed that before the publication of the report, there was a noticeable increase in short-selling activities concerning the futures of Adani Enterprises. Following the report's release, the stock plummeted by 59 percent between January 24, 2023, and February 22, 2023.

The SEBI inquiry uncovered that the K-India Opportunities Fund – Class F opened a trading account and began trading in Adani Enterprises shares prior to the report's release. The FPI later closed its positions in February, realizing a profit of $22.25 million or Rs 183.24 crore.

Hindenburg continues to stand by its January 2023 report, while the Adani Group has denied all allegations made by the short-selling firm.

In July of the previous year, the Supreme Court rejected a review petition against its January 3 ruling in the Adani Group-Hindenburg Research case, affirming its faith in SEBI's regulatory authority and stating that petitioners failed to supply sufficient evidence to warrant a transfer of the investigation to a special investigation team.

In January of last year, the Supreme Court declined to establish any SIT or expert group to probe the Adani-Hindenburg controversy, asserting that media and third-party reports did not constitute definitive proof.

"SEBI should pursue its investigation to its logical conclusion in accordance with the law. The circumstances of this case do not justify transferring the investigation away from SEBI," stated a bench led by then CJI D.Y. Chandrachud.

Despite ongoing attacks from Hindenburg Research and other US-based entities, the market capitalization of the Adani Group has surged to nearly Rs 12.80 lakh crore.

Each assault has ultimately fortified the Group, with challenges serving as stepping stones to create a more robust conglomerate. Recently, there have been numerous positive developments concerning Adani Group's companies, which have uplifted investor confidence.