New Delhi

The Securities and Exchange Board of India (SEBI) has slammed US-based short-seller Hindenburg Research with a show-cause notice over suspected violations of Indian regulations during the showdown with Adani last year.

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Hindenburg published a report alleging Adani was 'engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.' This triggered a $150 billion rout in Adani stocks. 

Hindenburg responded to SEBI in a blog post. The firm starts by saying, 'We have been aware that Indian securities regulator SEBI has been grappling with how they are going to respond to us, a U.S.-based research firm with no presence or operations in India, after we presented overwhelming evidence in January 2023 of why we believed Indian conglomerate Adani Group was operating “the largest con in corporate history. We had anticipated fierce opposition to our report before we ever published it, regardless of how comprehensive and truthful our body of evidence was.'

The post mentioned how Kotak Mahindra Bank created and oversaw an offshore fund structure that was used by its 'investor partner' to bet against the conglomerate. Interestingly, Hindenburg revealed making $4.1 million in gross revenue through 'gains related to Adani shorts from that investor relationship', and $31,000 from their short position on Adani US bonds. SEBI is yet to respond to the allegations.

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The post also mentioned how 'Big-4' auditor Deloitte resigned from its role as statutory auditor for Adani Ports, citing undisclosed related-party transactions flagged in the report.