During a peak parliamentary session in India, the US-based short-selling firm Hindenburg Research published a report, arrogantly presenting itself as holier-than-thou and mightier-than-thou. According to Hindenburg’s assertions, the Securities and Exchange Board of India (SEBI) issued them a show cause notice. However, rather than addressing this matter with the requisite decorum, Hindenburg chose to launch a series of baseless and antiquated accusations against both SEBI and the Adani Group. The firm arrogantly insinuated that all negative reportage concerning the Adani Group was their doing, and even floated conspiracy theories linking Gautam Adani with the SEBI chairman.
From a group that, in its so-called investigative reports, floats conspiracy theories and claims responsibility for a tectonic shift in the Adani Group, their words hold no more weight than a grain of salt. Nonetheless, we remain steadfastly committed to acting as a bulwark against any attacks on India and its thriving business entities.
1- Hindenburg Research termed SEBI’s show-cause notice as brazen
In reality, the notice from SEBI should have come sooner, if anything, but calling it brazen is audacious in itself. What do you expect from a regulatory body tasked with investigating the allegations you’ve leveled against them? Naturally, the Hindenburg Group needs to answer questions about the allegations that materialized out of thin air, their sources, and their inadequate disclaimer notes. The short-seller group issued 32,000 words of allegations against the Adani Group, and the investigative body is not supposed to question the source and basis of these claims, but believe every word from a firm whose sole job is to short-sell the very group it accuses?
Hindenburg, for its own personal gain, mounted an attack on an Indian business conglomerate, attempting to disrupt the entire economy. Did they really think they would get away with it because they are on the speed dial of the sinister George Soros?
2- “Shortly after our report, in August 2023, “Big-4” auditor Deloitte resigned from its role as statutory auditor”
Once again, really? Deloitte resigned eight months after Hindenburg’s report was published. Before Deloitte’s resignation, your report had already caused repercussions in Adani’s stock, and the group had already started to rise again like a phoenix. Suggesting that Deloitte chose to abandon the Adani Group just after Hindenburg’s report is preposterous at best. Deloitte is an auditing firm, and any ninth grader with a three-digit IQ can understand that the auditor of a company is like the ocean in which a ship floats; it can either keep the ship afloat or sink it. In this case, Deloitte did a commendable job, which was later corroborated by the Supreme Court committee’s investigative work. The committee’s report found no stock manipulation by the Adani Group.
Hindenburg, who prides itself on being a real investigative group based on material evidence, is left with nothing but insinuations and hypothetical scenarios.
Also Read: Financial Times allegation on Adani Group Exposed, Link Rooted to George Soros
3- Background behind the Show-Cause Notice to Hindenburg Group: Gautam Adani’s Meetings with SEBI Chairperson Madhabi Buch in 2022
It’s one thing to run a fabricated story, and another to concoct a conspiracy theory, but it’s utterly foolish to miss logical deductions. Hindenburg’s report claims that in October 2022, Gautam Adani met with SEBI Chairperson Madhabi Buch, without specifying the capacity in which this meeting occurred. The report was published in January 2023, and 18 months later, SEBI, allegedly at Adani’s behest, sends a notice to Hindenburg. This logic is even more absurd than Barack Obama being awarded the Nobel Peace Prize.
If the Adani Group were engaging in vendetta politics, SEBI would have sent a notice to the US-based short-seller group before investigating the Adani Group. However, the investigation proceeded as it was supposed to, without any undue influence from Adani.
4- Hindenburg Report’s Allegation Regarding Kotak Mahindra Group and the Offshore Fund Structure
The Hindenburg report alleges that the show-cause notice was prompted by the Kotak Mahindra Group, which supposedly created and oversaw the offshore fund structure used by their investor partner to bet against Adani. In response, the Kotak Mahindra Group stated unequivocally that Kotak Mahindra International Limited (KMIL) and KIOF have never had Hindenburg as a client, nor has Hindenburg ever been an investor in the Fund. The Fund was unaware of Hindenburg being a partner of any of its investors. KMIL also received a confirmation and declaration from the Fund’s investor that its investments were made as a principal and not on behalf of any other person.
SEBI is acting in accordance with the Supreme Court committee’s mandate to identify companies that may have benefited from the Adani Group’s downfall. SEBI is merely fulfilling its duty, while Kotak Mahindra Group attempted to shrug off the issue with a brief five-sentence reply. We can only hope that the regulatory body reaches the bottom of this matter through its investigation and delivers justice accordingly.
5- SEBI’s “Show Cause Notice”: After 1.5 Years Of Investigation, SEBI Identified Zero Factual Inaccuracies With Our Adani Research
Do I really need to remind the Hindenburg Group of the honorable Supreme Court’s stance on your investigations? The committee led by Justice Abhay Manohar Sapre, formerly of the Supreme Court, stated in its report that your claims could not be verified. The report found no evidence of a “regulatory failure” on SEBI’s part. Regarding the allegation that the Adani Group manipulated its stock price, the expert panel concluded that despite SEBI’s active surveillance framework, no pattern of artificial trading or “wash trades” among the same parties multiple times was detected. The system generated 849 alerts related to Adani stocks, which were reviewed by stock exchanges, resulting in four reports to SEBI—two well before the Hindenburg report and two after January 24, 2023.
The expert panel also observed that while there was high volatility in Adani stocks following the Hindenburg report, the overall market remained stable. According to SEBI, retail investors showed increased interest in Adani stocks after the report. The market has since re-priced and reassessed the Adani stocks, which have returned to their pre-January 24, 2023 levels and stabilized at these newly re-priced levels. The committee could not find any evidence of a regulatory failure on the legislative side and emphasized that SEBI has been consistently raising the bar in its stipulation of desirable conduct.
The Hindenburg report is rife with inaccuracies. Its three main accusations against the Adani Group and SEBI—stock manipulation, market volatility, and regulatory failure—have been thoroughly investigated, and the Supreme Court has given both entities a clean chit.
6- “Since Our Initial Report, At Least 40 Independent Media Investigations Have Corroborated And Expounded On Our Findings Or Have Uncovered New Issues Of Suspected Fraud Or Malfeasance At Adani”
Most of the reports cited by the Adani Group originate from foreign Western media publications, which many nationalistic Indians believe do not align with the prosperity of the Indian economy. It is common knowledge that the rise of Indian conglomerates correlates with the growth of the Indian economy—but rising against what? The West. However, a few reputable Indian media outlets have also published reports on the Adani Group, which we will now focus on.
In one instance, Hindenburg quoted a Live Mint report stating that Adani decided to stop inter-corporate deposits to companies outside the Adani Group. Inter-corporate deposits are a common practice used to fund cash-strapped companies to facilitate their operations. The report mentioned that Adani Group made this decision to recover debts, and Hindenburg absurdly claimed credit for this outcome. What folly!
In another instance, the Hindenburg report quoted a Bloomberg article claiming that US agencies are investigating the Adani Group for bribery. This is a blatant lie. The Adani Group has refuted this claim. However, a short-seller accustomed to one-sided stories cannot fathom honest journalism. Adani Enterprises Limited has stated unequivocally that it has not received any notice from the US Department of Justice regarding any bribery allegations.
7-“The message sent to investors in India is equally loud: You have no real protection from fraud. Corporate governance in India is a myth for businessmen that can buy influence.”
At the conclusion of their long and uninspired report, the Hindenburg Group has utterly lost their credibility. They irresponsibly label the Adani Group, the Indian Government, and SEBI as corrupt organizations. This tedious work is devoid of facts or evidence, merely venting frustration. Despite their infamous report, the US State Department didn’t hesitate to grant Adani a $533 million loan to build a strategically important port in Sri Lanka. The United States and India are leveraging Adani’s services to counter the Chinese threat in the Indian Ocean region. Meanwhile, Hindenburg is being investigated by the Department of Justice for their numerous malicious actions.
When SEBI issued a show-cause notice to Hindenburg, instead of cooperating respectfully with the investigation, the short-seller resorted to blaming and attacking SEBI for simply doing its job.
In conclusion, Hindenburg’s report exemplifies shoddy, agenda-driven journalism lacking substantive evidence. Their reckless accusations against the Adani Group, the Indian Government, and SEBI are not only baseless but also display a profound ignorance of logical reasoning. When SEBI issued a show-cause notice seeking further information about their report, Hindenburg, like a rat caught in a trap driven by greed, resorted to attacking everyone except themselves. This response, rooted in arrogance and devoid of any solid foundation, reveals their true nature. Hindenburg’s erroneous and malicious behavior speaks volumes—they are nothing more than thugs masquerading as investigators.
