Hindenburg Research India Suggests Impending Major Revelation

In January 2023, Hindenburg Research India made headlines with a scathing report targeting the Adani Group, controlled by Gautam Adani. The impact of this report was substantial, leading to a significant and rapid decline in the value of the Adani Group's stocks.

On Saturday morning, the U.S.-based short-seller, Hindenburg Research, hinted at another major disclosure related to Hindenburg Research India, posting a message on X, a platform owned by Elon Musk, that read, "Something big soon India."

Hindenburg Research India Report on Adani Group

The timing of the Hindenburg Research India report in January 2023 was particularly critical, as it coincided with Adani Enterprises' planned share sale. This led to an extraordinary $86 billion decline in the market capitalisation of the Adani Group's stocks. This dramatic loss in stock value also triggered a widespread sell-off of the group’s bonds listed internationally.

In June of this year, Hindenburg Research India once again captured attention when it disclosed that the Securities and Exchange Board of India (SEBI) had issued a notice alleging regulatory violations. This marked a significant moment as Hindenburg Research India, for the first time, explicitly named Kotak Bank in its report, resulting in a substantial decline in Kotak Bank's stock value, which reached its lowest point since June during the early trading session.

Hindenburg Research India dismissed SEBI's June 27, 2024, notice as "nonsense," asserting that it was fabricated to serve a predetermined purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by influential individuals in India.

Allegations Against Hindenburg Research India and Kotak Bank

Hindenburg Research India further stated, "While SEBI seemingly contorted itself to assert jurisdiction over us, its notice conspicuously failed to name the entity with an actual connection to India: Kotak Bank, one of India's largest banks and brokerage firms, founded by Uday Kotak, which created and managed the offshore fund structure utilized by our investor partner to bet against Adani. Instead, it merely referenced the K-India Opportunities Fund, masking the 'Kotak' name with the acronym KMIL."

The statement continued, "We suspect SEBI’s omission of Kotak or any other Kotak board member may be intended to shield yet another powerful Indian businessman from scrutiny, a role SEBI appears willing to play."

SEBI's notice outlined connections between Hindenburg Research India and New York hedge fund manager Mark Kingdon. SEBI alleged that Hindenburg shared an advance copy of its report on the Adani Group with Kingdon approximately two months before its public release in January 2023, enabling substantial profits through strategic trading.

The SEBI notice further disclosed that Kingdon Capital held significant investments in Kotak Mahindra Investments Limited (KMIL). It was revealed that Kingdon Capital capitalized on the market volatility induced by the report, strategically allocating $43 million to establish short positions in Adani Enterprises Ltd (AEL) before the report’s publication. Subsequently, Kingdon Capital successfully closed these positions, generating a profit of $22.25 million.

Moreover, the SEBI notification included time-stamped communications between hedge fund personnel and traders affiliated with Kotak Mahindra Investments Limited. These exchanges pertained to the trading of futures contracts linked to Adani Enterprises, suggesting complex financial dealings between the involved parties.

In response to SEBI’s allegations, Kingdon Capital asserted that it possessed the legal authority to engage in these research agreements, allowing it to receive and utilize reports prior to their public release.

Conversely, Kotak Mahindra Bank denied any knowledge of Kingdon’s association with Hindenburg Research India or involvement in the exploitation of sensitive financial information.