ALLEGATIONS OF CHINESE LINK IN HINDENBURG REPORT

The potential China connection in the Hindenburg case assumes importance given the Adani Group's competition with Chinese interests globally.

The Hindenburg-Adani saga has taken a dramatic turn, with India’s market regulator, SEBI, issuing a 46-pages notice to Hindenburg Research. This notice is part of SEBI’s investigation into trading activities related to Adani Enterprises. The development follows Hindenburg’s critical report on the Adani Group, which was released in January of last year and has since had significant repercussions.

SEBI’s notice revealed two new players: Kingdon Capital Management LLC, a New York hedge fund, and an offshore fund structure operated by Kotak Mahindra Bank. The notice alleges that Hindenburg had exclusively shared its Adani research with Kingdon Capital before publication, with the two firms having a profit-sharing arrangement. Kingdon reportedly used Kotak Mahindra Bank for its trading.

The entire saga gained more attention after senior lawyer and Rajya Sabha member Mahesh Jethmalani, on Friday claimed that Mark Kingdon, the American businessman behind Kingdon Capital Management LLC, commissioned the Hindenburg report. Jethmalani said that Kingdon approached Kotak Mahindra Investments Limited (KMIL) to establish an offshore fund and accounts for trading Adani shares, resulting in the creation of the Kotak India Opportunity Fund (KIOF).