'Nonsense, Concocted': Hindenburg Responds To SEBI Notice Over 2023 Adani Report

After markets regulator SEBI issued a show cause notice to Hindenburg over its report of alleged stock manipulation by Adani Enterprises, the research group has dismissed the notice and called its a "concocted attempt to silence those who expose corruption".

SEBI has issued a notice to Hindenburg Research LLC, Nathan Anderson, and the entities of Mauritius-based foreign portfolio investor Mark Kingdon. The regulator has alleged thatHindenburg and Anderson have violated regulations placed by SEBI under the SEBI Act, SEBI's Prevention of Fraudulent and Unfair Trade Practices, and SEBI's Code of Conduct for Research Analyst.

FPI Kingdon has been accused of violating the SEBI Act, SEBI's Prevention of Fraudulent and Unfair Trade Practices, and SEBI's Code of Conduct for Foreign Portfolio Investors.

The 46-page show cause notice was delivered to Hindenburg and others on June 27.

SEBI has claimed that the disclaimers in the 2023 report published on Adani Enterprises and its alleged stock manipulation, were misleading as the firm was "indirectly participating in the Indian securities market."

Hidenburg Defends Adani Report, Claims SEBI Notice 'An Attempt To Silence'

In a blog post on July 2, Hindenburg Research LLC has defended its 2023 Report on the Adani group and slammed the notice issued by SEBI. As per the research group, the notice is "nonsense, concocted to serve a pre-ordained purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India.".

The Hindenburg Report included "evidence that Adani engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”

"We also detailed how a network of opaque offshore fund operators surreptitiously helped Adani evade minimum shareholder listing rules, citing numerous public documents and interviews to substantiate the allegations," Hindenburg added.

The research group also stated that "SEBI identified zero factual inaccuracies with our Adani research. Instead, the regulator took issue with things like our use of the word 'scandal' when describing multiple prior instances of Adani promoters being charged with fraud by Indian regulators, and our quoting of an individual that alleged SEBI is corrupt and works 'hand in glove' with conglomerates like Adani to help it skirt regulations".

HIndenburg also stated that to date Adani has not addressed these allegations and continues to dismiss them. Despite the SEBI notice, the group stands firm behind its 2023 report.