Hindenburg Reports On Adani Continue, Cause Upheaval

Reuters Francis Mascarenhas

MUMBAI (REUTERS/Agencies) – India’s markets regulator asked investors on August 11 to remain calm and exercise due diligence before reacting to reports by US-based short seller Hindenburg Research.

Hindenburg has alleged that the head of Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, previously held investments in offshore funds also used by the Adani Group.

Hindenburg, named after the 1937 airship disaster, is a New York-based short seller. It caused one of the most stunning upheavals in India’s corporate history in January 2023 when it alleged improper use of tax havens and stock manipulation by the Adani Group.

Adani Group companies shed as much as $19 billion in market value on August 12 based on the report.

SEBI meanwhile said the allegations made by Hindenburg against the Adani group have been duly investigated and 23 out of 24 investigations were completed in March 2024. One remaining investigation is close to completion.

“As a matter of policy SEBI refrains from commenting on any investigation and ongoing enforcement matter,” SEBI said.

Defending its chief, the regulator said Buch made relevant disclosures required in terms of holdings of securities and their transfers and that she has recused herself in matters involving potential conflicts of interest.

Buch in a separate statement said that her investment in offshore funds mentioned in the Hindenburg report predates her appointment at SEBI by two years.

Indian equity markets have been booming, drawing large funds from domestic institutional and retail investors.

The benchmark Nifty index has gained 11.87% in the last six months.

A mutual fund lobby body on Sunday called the Hindenburg report as an attempt to create sensation by connecting random events from the past.

The Association of Mutual Funds in India asserted that India’s financial system is secure, transparent, designed to foster growth and innovation with high integrity.