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Senior advocate alleges ‘China angle’ in Hindenburg report against Adani Group



NEW DELHI: Rajya Sabha MP and senior advocate Mahesh Jethmalani on Thursday alleged that China was involved in the preparation of the Hindenburg report against the Adani group, which led to the group losing over $153 billion in market value. In a series of posts on X, the Rajya Sabha MP claimed that the Hindenburg group was hired by American businessman Mark Kingdon.Kingdon then approached Kotak’s International Investment to trade in Adani shares. The funds for this were provided by Kingdon through his Master Fund, which is owned by the Kingdon family. This family includes Kingdon’s “very high profile” wife, Anla Cheng.
Sebi on June 26 issued a show-cause notice to Hindenburg, questioning why action should not be taken against the short-seller for potentially violating regulations related to the “prohibition of fraudulent and unfair trading practices in the securities market”.

The extensive 46-page Sebi notice is addressed to Hindenburg Research, its founder Nathan Anderson, partner investor Mark Kingdon and his associated companies, as well as K India Opportunities Fund, a foreign portfolio investor established by the Kotak group.

Jethmalani alleged that Cheng is a lobbyist for Chinese interests in the United States and served as the CEO of SupChina, who he claimed is ‘a pro-China media corporate initiative’ which later ‘morphed’ into The China Project. The Rajya Sabha MP added that The China Project was shut down after calls for an investigation by US senators for ‘subversive’ activities including having links to the Chinese Communist Party (CCP), who Jethmalani alleged has ‘a bone to pick with the Adani group’.

In January 2023, Mark Kingdon’s fund transferred $43 million to the K India Opportunities Fund, which subsequently initiated short-selling positions in Adani Enterprises using futures contracts, as per the notice. These short positions were closed by February 22, generating a profit of $22 million. By June 1, Kingdon’s fund had transferred $4.1 million from the Adani short sale profits to Hindenburg.

Jethmalani in his post called for a ‘thorough’ investigation into the following issues:
1. Who introduced the Kingdons to KMIL, what due diligence was conducted by KMIL regarding the Kingdons and did it participate in the short sell as a principal?
2. Did all the Indian actors – politicians, businessmen and financial intermediaries who aided Hindenburg with the preparation of its Adani report and its publication after the short sale know about its short selling motives and did they financially benefit from it?
3. Did KMIL and the said Indian actors know about the Chinese connection behind Hindenburg?
Hindenburg has termed the notice “nonsense” and “nebulous”, alleging it was an attempt to silence the firm. Despite the $153 billion decline in Adani group’s valuation, Hindenburg claimed it only profited $4 million from the operation.
In a statement, Hindenburg said: “Sebi has neglected its responsibility, seemingly doing more to protect those perpetrating fraud than to protect the investors being victimised by it.”





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