The saga between short-seller Hindenburg Research and the Adani Group continues. Hindenburg recently submitted its response to a show cause notice issued by the Securities and Exchange Board of India (SEBI) regarding its scathing report on the Adani Group.
Hindenburg’s report, released in January 2023, accused the Adani Group of stock manipulation and accounting fraud. The report caused a major upheaval in Indian markets, with Adani companies’ shares experiencing significant losses. SEBI subsequently launched an investigation and issued a show cause notice to Hindenburg, seeking clarification on their report.
Hindenburg’s response to SEBI is strong and critical. They have called the show cause notice “nonsense” and a tool to “silence and intimidate those who expose corruption.” The report claims SEBI is attempting to protect powerful individuals and businesses in India.
Hindenburg’s response outlines several key points defending their report:
- No Factual Errors: They claim their report contains no factual inaccuracies and that SEBI’s 1.5-year investigation found none either.
- Adani’s Silence: Hindenburg argues that the Adani Group has failed to address the specific allegations raised in their report, resorting to blanket denials of media reports instead.
- Independent Corroboration: Hindenburg highlights that at least 40 independent media investigations have corroborated or expanded upon their findings, suggesting widespread financial irregularities within the Adani Group.
The response goes beyond just defending the report. Hindenburg questions SEBI’s motives, particularly regarding the exclusion of Kotak Bank from the notice. Uday Kotak, founder of Kotak Bank, is mentioned, with Hindenburg suggesting SEBI might be protecting powerful businessmen. Kotak Bank has previously been linked to the Adani Group in media reports.
The Adani Group has consistently denied all allegations of fraud and wrongdoing raised by Hindenburg. They have maintained that their financial practices are sound and compliant with regulations.
What’s Next?
SEBI will now review Hindenburg’s response and decide on further action. The outcome could be a dismissal of the case, further investigation, or even penalties for Hindenburg. The Adani case continues to be a major story in India, with significant implications for the country’s financial markets and regulatory environment.
It’s important to note that this is an ongoing case, and no final decisions have been made.