Is an India-focused report coming soon? ‘Something big is on the horizon,’ says US short seller Hindenburg

Hindenburg Research, a US-based firm, has recently suggested a forthcoming report focused on India, over a year after its allegations against the Adani group, which included claims of insider trading and other stock market violations.

The ambiguous message shared on the company’s X social media account, read: “Something big will happen soon, India.

The Adani Group was accused of financial wrongdoing in a report released by Hindenburg in January 2023, which caused the stock price of the business to plummet.

The report accused the conglomerate of stock manipulation and fraud, resulting in a significant drop in the shares of various Adani Group companies, with reported losses exceeding USD 100 billion. This report from the US short seller was released just two days before Adani Enterprises launched a $2.5 billion follow-up public offering.

In July 2023, Mahesh Jethmalani, a senior Indian lawyer and BJP leader, alleged that Mark Kingdon, a US-based businessman with Chinese connections, had commissioned the Hindenburg Research report.

According to Jethmalani, Hindenburg Research was contracted by Kingdon and his spouse, Anla Cheng, to write the research on the Adani Group. He also claimed that they made millions of rupees at the expense of Indian regular investors by using Kotak Mahindra Investments Limited (KMIL) to open a trading account for the purpose of short-selling Adani shares.

Jethmalani further urged the government to look into the connections between China and political voices that targeted the Adani group following the Hindenburg report. He implied that China was retaliating against the Adani group for not being able to win major contracts like the Haifa Port.

The Securities and Exchange Board of India (SEBI) finding that the Adani group was not found guilty of the Hindenburg accusations was accepted by the Supreme Court. A review petition to establish a Special Investigation Team (SIT) under court supervision to look into the Adani-Hindenburg controversy was also recently dismissed by the Supreme Court.

In June 2023, at the Annual General Meeting (AGM) of Adani Enterprises, Group Chairman Gautam Adani responded to the allegations by saying they were “confronted with unfounded accusations from a foreign short seller, challenging our decades of hard work.