Rajya Sabha’s Member of Parliament and senior advocate Mahesh Jethmalani has demanded transparency and accountability in the investigation of the Adani-Hindenburg case. On Thursday, Jethmalani made three critical demands for a thorough investigation into the allegations against the American financial research firm, Hindenburg Research, and its connections with foreign investor Kingdon Capital.
The Adani-Hindenburg Controversy
The controversy began when Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud. The Securities and Exchange Board of India (SEBI) has been investigating these claims, uncovering potential collusion between Hindenburg and Kingdon Capital. SEBI’s findings suggest that Hindenburg, along with Mark Kingdon and his entities, engaged in a scheme to use confidential information to profit from short-selling Adani Enterprises Ltd. futures.
Jethmalani’s Three Critical Demands
- Introduction and Due Diligence: Jethmalani wants to know who introduced Kingdon Capital to KMIL (a financial intermediary), the level of due diligence conducted by KMIL regarding Kingdon, and whether KMIL participated in the short-selling activities.
- Involvement of Indian Actors: He seeks to uncover whether any Indian actors, including politicians, businessmen, or financial intermediaries, were involved in aiding Hindenburg in preparing and publishing its report on the Adani Group after the short sale. Jethmalani questions if these actors were aware of Hindenburg’s motives and if they financially benefited from the report.
- Potential Chinese Connections: Lastly, Jethmalani demands clarity on whether KMIL and the involved Indian actors knew about any Chinese connections behind Hindenburg.
The Allegations and SEBI’s Investigation
SEBI’s investigation revealed that Hindenburg Research, Mark Kingdon, and his entities profited around $31.4 million by short-selling Adani Enterprises futures. This action involved using non-public information to build short positions, which means they bet on the stock price falling.
Jethmalani’s Call for Action
Jethmalani shared his views on social media, emphasizing the need for a thorough investigation. In a tweet, he called the short sale of Adani shares by Hindenburg a “huge smoking gun” and urged SEBI to uncover the truth behind the collusion.
The demands made by Jethmalani underline the necessity for transparency in financial dealings. As the investigation progresses, it is crucial for SEBI to address these concerns to maintain market integrity and investor confidence. The Adani-Hindenburg case serves as a reminder of the complex nature of global financial markets and the ongoing need for vigilant regulation and oversight.