Hindenburg Research Dismisses SEBI Notice as 'Baseless' and 'Fabricated'
Overview
Hindenburg Research , has strongly replied to SEBI’s show cause notice regarding Adani Group in 2023. Hindenburg Research has called the show cause notice as ‘baseless’ and ‘fabricated’, since Hindenburg has considered the show cause notice as an effort made by SEBI to suppress and threaten the entities who expose corruption and fraud done by powerful individuals in India.
Hindenburg Research’s Allegation on SEBI
In Hindenburg Research’s webpage, they have posted that Hindenburg Research believes that the SEBI’s show cause notice is ‘fabricated’ for a specific reason to suppress and threaten Hindenburg Research for exposing corruption and fraud in Adani Group’s case.
SEBI’s Show Cause Notice to Hindenburg Research
On 27th June, 2024, SEBI has issued 46 pages show cause notice to Hindenburg Research regarding the technical details and disclaimers of the Hindenburg Research report on Adani Group. SEBI’s show cause notice did not contain any content that discussed the allegations kept by Hindenburg on Adani Group and Kotak Bank.
Hindenburg Research’s Criticism on SEBI’s Neglection
Hindenburg Research was holding a short position on Adani Group shares through an offshore fund structure managed by Kotak Bank. According to Hindenburg Research , Kotak Bank played a key role in organizing an offshore fund structure of Adani Group , which paved the way for the Hindenburg investors to take short positions in Adani Derivatives. But SEBI’s show cause notice did not mention any point on Kotak Bank’s role in Adani Group’s Allegation, which is one of the financial institutions in India.
Accusation on SEBI for Imposing on Brokers
Hindenburg Research also accused SEBI that SEBI imposed pressure on brokers to close short positions taken on Adani Group shares by stating lengthy and costly investigations, which in turn laid the groundwork for Adani’s Stock prices.
Overview of Hindenburg’s Accusation Report on Adani Groups
On 23rd January, 2023, Hindenburg Research reported an accusation of Adani Group’s stock manipulation and accounting’s related fraud. This accusation was in the midst of Adani Enterprises Rs.20000 crore share sale. But Adani Group did not accept the accusation, claiming Hindenburg’s report as ‘unfounded’ and ‘malicious. The Supreme Court of India, ordered only SEBI would take care of the stock scrutinization and no other investigation would be taken on Hindenburg’s accusation. On order of supreme court, SEBI undertook the investigation with Adani Group on the accusation of misuse of tax havens and stock manipulation under the basis of existing SEBI’s regulatory framework and disclosure rules for offshore fund structure.
Conclusion
On 27th June, 2025, SEBI issued a show cause notice to Hindenburg Research for which Hindenburg replied on 2nd July, 2025 as 'baseless' and 'fabricated.' The Hindenburg Research replied that SEBI's notice focussed only on technical details and disclaimers rather than on the accusative claims made in Hindenburg's report on the Adani Group. Hindenburg criticizes SEBI for not mentioning Kotak Bank's role in managing the offshore fund structure of Adani shares in which Hindenburg took a short position. Further, Hindenburg accuses SEBI of imposing pressure on brokers to close short positions on Adani shares, which they claim laid the ground for stabilization of Adani's stock prices. This criticism follows Hindenburg's earlier allegations on Adani Groups for stock manipulation and accounting fraud.
Frequently Asked Questions
What was Hindenburg Research's reply to SEBI's show cause notice?
Hindenburg Research replied to SEBI's show cause notice as 'baseless' and 'fabricated.' Hindenburg Research considered it as an attempt by SEBI to suppress and threaten entities exposing corruption and fraud.
What allegations did Hindenburg make against SEBI in their response?
Hindenburg accused SEBI of fabricating the notice to hide their exposure of corruption within the Adani Group. Hindenburg Research also criticized SEBI for focusing on technical details rather than the claims of their report.
What role did Kotak Bank play according to Hindenburg Research?
Hindenburg Research claimed Kotak Bank managed the offshore fund structure used for their short position on Adani shares.
How did Hindenburg Research criticize SEBI's show cause notice?
Hindenburg Research criticized SEBI for not considering Kotak Bank's role in Adani Group’s allegations and for imposing pressure on brokers to close short positions on Adani shares, which they believe helped stabilize Adani's stock prices.
What did Supreme Court's order on Hindenburg Research’s accusations against Adani Group?
The Supreme Court of India ordered only SEBI to investigate Hindenburg's accusations against the Adani Group which focussed on usage of tax havens and stock manipulation in offshore fund structure.
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