Hindenburg Research Faces SEBI’s Scrutiny: Show Cause Notice Over Adani Trading Claims

The SEBI notice did not "conspicuously" name Kotak Bank with which Hindenburg has ties with.
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Hindenburg Research, a US-based investor research firm, revealed on Monday that it has been served a show cause notice by the Securities and Exchange Board of India (SEBI) regarding its trading activities involving Adani Enterprises Ltd. According to Hindenburg, SEBI’s actions are in response to its report from January last year, which alleged stock manipulation and accounting fraud within the Adani Group.

Allegations and Response

In its report, Hindenburg accused the Adani Group of fraudulent practices, coinciding with the period before the launch of Adani Enterprises Ltd’s Rs 20,000 crore follow-on public offer (FPO), which was subsequently canceled. The firm claims that SEBI’s notice is an attempt to silence and intimidate those who expose corruption involving influential figures in India.

Trading Details and Profit Claims

SEBI’s notice reportedly highlighted the trading activities of one foreign portfolio investor (FPI), K India Opportunities Fund Ltd – Class F, which allegedly made significant profits by shorting Adani’s shares just prior to and following the publication of Hindenburg’s report. Hindenburg asserts that the “K” in the fund’s name refers to Kotak Bank, suggesting involvement by a major Indian financial institution.

Criticism of SEBI’s Approach

Hindenburg criticized SEBI for omitting direct references to Kotak Bank or its founder, Uday Kotak, in its notice. The firm insinuated that SEBI’s actions may be protecting influential figures from scrutiny rather than pursuing genuine financial misconduct.

Legal and Financial Impact

Regarding its own financial dealings, Hindenburg disclosed earning approximately $4.1 million from its investor relationships related to Adani shorts, with minimal gains from its own direct investments. The firm emphasized the substantial costs incurred in legal fees and global investigations related to its Adani report.


The unfolding dispute underscores broader concerns about regulatory transparency and accountability in India’s financial markets. SEBI, Kotak Mahindra Bank, and the Adani Group have yet to respond to these latest allegations, highlighting the complexity and sensitivity surrounding the case.

Stay tuned for further developments as the regulatory and legal implications continue to unfold.

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