Last year, a Hindenburg report on Adani Group created such a stir that the group had to suffer a loss of $ 153 billion. Who was involved in this short seller attack on Adani has been revealed in a Bloomberg report. According to the report of news agency Bloomberg, an activist short-seller, a New York hedge fund, a Mauritius-based investor and a broker associated with a big Indian bank played a role in this short seller attack.
A fresh war of words between American short seller firm Hindenburg Research and SEBI has revealed an interesting cast of hidden characters behind the report against Adani Group. Posting a rebuttal on its website on Monday, Hindenburg added a link to SEBI’s ‘show cause notice’.
Who are the main characters?
In new revelations, the SEBI letter showed for the first time that Hindenburg had exclusively shared its Adani research with Kingdon Capital Management LLC before it was published and that there was a profit sharing deal between the two firms. The New York hedge fund made three times as much money on short bets as on the Hindenburg. Additionally, Kingdon took the help of one of India’s largest banks to execute the trade.
The notice sent to Hindenburg, and its founder Nathan Anderson, Kingdon founder Mark Kingdon and Mauritius-based investor K India Opportunities Fund is part of Sebi’s probe into trading activity around Adani Enterprises Ltd, the flagship company of the billionaire Adani family.
Kingdon had entered into a profit sharing agreement with Hindenburg. For the Adani short bet, the cut was reduced to 25% due to the additional time and effort required to route the trades through the K India Fund.
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Last year, a Hindenburg report on Adani Group created such a stir that the group had to suffer a loss of $ 153 billion. Who was involved in this short seller attack on Adani has been revealed in a Bloomberg report. According to the report of news agency Bloomberg, an activist short-seller, a New York hedge fund, a Mauritius-based investor and a broker associated with a big Indian bank played a role in this short seller attack.
A fresh war of words between American short seller firm Hindenburg Research and SEBI has revealed an interesting cast of hidden characters behind the report against Adani Group. Posting a rebuttal on its website on Monday, Hindenburg added a link to SEBI’s ‘show cause notice’.
Who are the main characters?
In new revelations, the SEBI letter showed for the first time that Hindenburg had exclusively shared its Adani research with Kingdon Capital Management LLC before it was published and that there was a profit sharing deal between the two firms. The New York hedge fund made three times as much money on short bets as on the Hindenburg. Additionally, Kingdon took the help of one of India’s largest banks to execute the trade.
The notice sent to Hindenburg, and its founder Nathan Anderson, Kingdon founder Mark Kingdon and Mauritius-based investor K India Opportunities Fund is part of Sebi’s probe into trading activity around Adani Enterprises Ltd, the flagship company of the billionaire Adani family.
Kingdon had entered into a profit sharing agreement with Hindenburg. For the Adani short bet, the cut was reduced to 25% due to the additional time and effort required to route the trades through the K India Fund.
By the end of December Kingdon began subscribing to the fund’s shares. Transferred $43 million in two tranches to build short position in Adani Enterprises in January. Kingdon Capital entered into an agreement with Kotak Mahindra (International) Ltd., or KMIL, to help execute trades.
Created a short position of 850,000 shares before the report was released
A few days before the release of the report, K India Fund created a short position of 850,000 shares through futures contracts between January 10 and 20 and squared-off these positions between February 1 and February 22. SEBI said in the notice that these bets resulted in a profit of $22.3 million. Kingdon owed Hindenburg $5.5 million as part of his deal with the short-seller. About $4.1 million had been paid as of June 1, SEBI notes.
Hindenburg blames SEBI
In his statement dated July 1, Hindenburg also hit out at SEBI for hiding the links between this transaction and Kotak Mahindra Bank Ltd. Hindenburg has blamed SEBI for fraud.
Hindenburg said, “Its notice clearly fails to name the party that has a material connection to India. Kotak Bank is one of India’s largest banks and brokerage firms founded by Uday Kotak. It was used by Kingdon. It took the name K-India Opportunities Fund and abbreviated the name “KAML”, said Hindenburg, who oversees the offshore fund structure.
What did Kotak Bank say?
Kotak Bank said in a statement on Tuesday that Hindenburg has never been a client of Kotak Mahindra International nor has it ever been an investor in India Opportunities Fund. The fund never knew that Hindenburg was a partner in any of its investments.
