/financial-express-hindi/media/media_files/iLvHtLqGWFu97PgklKXF.jpg "Hindenburg makes shocking claim on Kotak, calls SEBI’s notice ‘nonsense’")
Kotak named in Hindenburg’s reply to SEBI show cause notice : Hindenburg Research, an American firm that has made several serious allegations against the Adani Group, has responded to SEBI’s show cause notice in a very harsh manner. What is also surprising is that Hindenburg has also mentioned names like Uday Kotak, Kotak Bank and Kotak Mahindra Investment Limited (Kotak Mahindra Investment Limited – KMIL) in the statement issued in response to SEBI’s notice. Hindenburg has claimed that KMIL has played a role in creating the offshore fund structure used by its investment partner for short selling business in the Adani Group. No response has been received from SEBI or Kotak Group so far on these claims made in Hindenburg Research’s statement.
Hindenburg accuses SEBI
Hindenburg Research, in its response, has described the show cause notice of market regulator SEBI as “nonsense” and “fabricated to fulfill a predetermined purpose”. According to Hindenburg, this “predetermined purpose” is to “try to silence and intimidate those who expose corruption and fraud committed by some of the most powerful people in India.” Hindenburg Research is the same American firm, which last year had made several serious allegations against the Adani Group, including stock market manipulation and accounting fraud to increase the price of its shares and due to these allegations, the shares of Adani Group fell drastically. Adani Group has denied all these allegations calling them baseless. No allegation has been proved against the Adani Group even in the SEBI investigation conducted under the supervision of the Supreme Court.
Also read: PPF interest rate not increased again, so is NPS a better option? Where will you get how much return?
Question raised on SEBI’s jurisdiction
In a statement issued in response to SEBI’s notice, Hindenburg has also claimed that it is an American firm that has no business in India, yet SEBI has unsuccessfully tried to prove that its functioning comes under the purview of the Indian regulator. In this statement issued on Tuesday, the American firm has said that SEBI has issued a show cause notice to it for alleged violation of rules while betting on Adani Group shares. Hindenburg said that it received an email from SEBI on June 27 and later received a show cause notice mentioning possible violation of Indian rules.
Also read: Top infrastructure funds have given excellent returns in 5 years, will the trend get stronger after the budget
Hindenburg makes a shocking claim on Kotak Bank
Hindenburg Research has also made a shocking claim about Kotak Bank in response to SEBI’s show cause notice. The American firm has said in its statement, “On one hand, SEBI gave confusing arguments to claim that we are within its jurisdiction, but in its notice it did not clearly name the party that actually has a connection with India. This name is Kotak Bank, founded by Uday Kotak, which is one of India’s largest banks and brokerage firms and which created and oversaw the offshore fund structure used by our investor partner to bet against Adani.” According to Hindenburg, SEBI has only mentioned K-India Opportunities Fund in its notice and has tried to hide the name “Kotak” under the abbreviation of “KMIL”. The American firm has stated in the footnote below its statement that KMIL actually means Kotak Mahindra Investment Limited.
Also read: HDFC Mutual Fund: Rs 8.30 crores collected from SIP of Rs 10,000! The wonder of this 27-year-old large-cap fund
Sebi’s aim is to protect powerful businessmen: Hindenburg
Hindenburg wrote in its response, “Kotak Bank founder Uday Kotak was the head of SEBI’s 2017 Corporate Governance Committee and we suspect that SEBI’s motive for not mentioning Kotak or any other member of the Kotak board may be to protect another powerful Indian businessman from potential investigation. This is a role that SEBI seems to be adopting.” There has been no response from SEBI or Kotak Group on these points mentioned in Hindenburg Research’s statement so far.
Also read: Income Tax: How to register on e-filing portal, this work is necessary to file ITR
Never hid the fact that I was ‘short’ on Adani: Hindenburg
According to a statement issued by Hindenburg, while issuing a report alleging “brazen stock manipulation and accounting fraud” in the Adani Group, it itself had disclosed that it had placed a bet on the fall in Adani’s shares. That is, it had traded in Adani Group’s shares by predicting a fall in them. The firm has said that “this was not a secret. In fact, everyone around the world knew that we had ‘shorted’ Adani, because we ourselves had disclosed this repeatedly.”
Also read: Many big announcements by SEBI chief, will affect mutual funds, brokers and companies
How much did Hindenburg earn from short selling on Adani
Hindenburg has claimed that it did not earn as much as is estimated from short selling on Adani through its investor partner. The US firm has said in its statement, “Did Hindenburg work with dozens of firms to short Adani and earn hundreds of millions of dollars? No – we had only one investor partner and our earnings in this trade were barely above the cost (barely come out above breakeven).” According to the American firm, through this investor relationship, it earned a total of 4.1 million US dollars (about Rs 34 crore) from short selling on Adani, while it earned only 31 thousand US dollars (about Rs 25 lakh) from short position in the group’s US bonds. Adani Group has repeatedly denied all the allegations made by Hindenburg. But Hindenburg has claimed in its report that even after 1.5 years of investigation, SEBI has not been able to find any flaw in our allegations against Adani Group in terms of facts.
/financial-express-hindi/media/media_files/sokxdYCt08l756zifwPn.jpg "FD Rates: These banks changed the FD rates in July, now you are getting up to 8.75% interest, full list"){kind=small}
/financial-express-hindi/media/media_files/iLvHtLqGWFu97PgklKXF.jpg&description=Hindenburg%20makes%20shocking%20claim%20on%20Kotak%2C%20calls%20SEBI%E2%80%99s%20notice%20%E2%80%98nonsense%E2%80%99){kind=link}