SEBI, the market regulator of India, has issued show cause notices to Hindenburg Research, the research firm, their representative Nathan Anderson, and the entities of the Mauritius-based FPI Mark Kingdon in a major development. The notices include several alleged violations of SEBI regulations about trading in Adani Enterprises Ltd.’s shares in the period preceding and after the release of the Hindenburg report.
Under SEBI regulations, Hindenburg and Anderson have been reported to violate sections under the SEBI Act, PFUTP regulation, and the code of conduct regulation for research analysts.
Further, the FPI entities connected with Mark Kingdon have been accused of breaching the SEBI Act, SEBI’s PFUTP regulations, and SEBI’s Code of Conduct for FPIs.
The regulator has noted that Hindenburg and the FPI entities provided a disingenuous disclaimer to their report, stating that the report’s findings were meant for entities that trade outside India… However, the report is replete with references to listed firms in the country.
SEBI has also accused Kingdon’s entities of helping Hindenburg indirectly enter the Indian equity market and trade in Adani Enterprises through the contracts of AEX Future under the Indian derivatives market, offering profits to the research firm.
Hindenburg, however, stands by its January 2023 report that contained several accusations against the Adani Group that led to sharp selling in the conglomerate’s stocks.
The recent development unfolds the consistent focus and regulation-related approaches toward the Hindenburg-Adani affair, which has been trending in India’s financial markets over the past several months.
