SEBI sends show cause notice to US shortseller Hindenburg and Nathan Anderson in Adani case

The Securities and Exchange Board of India (SEBI) has issued a show cause notice to US shortseller Hindenburg Research, Nathan Anderson and Mauritius-based FPI Mark Kingdon for issuing misleading reports about Adani Group companies. SEBI issued this notice for violation of trading rules in Adani Enterprises shares (Adani Enterpris Share Price).

Indian market regulator SEBI alleges that Hindenburg and Anderson have violated the Prevention of Fraudulent and Unfair Trade Practices Regulations, SEBI's Code of Conduct for Research Analyst Regulations under the SEBI Act.

At the same time, FPI Kingdon is accused of violating SEBI's Code of Conduct for FPI Regulations in addition to the Prevention of Fraudulent and Unfair Trade Practices Regulations.

Market regulator SEBI said, 'Hindenburg and the FPI issued a misleading disclaimer that the report was only for the valuation of securities traded outside India, while it was clearly related to companies listed in India.'

SEBI also claims that FPI Mark Kingdon helped Hindenburg to indirectly get involved in Adani Enterprises to trade in Adani Enterprises futures in the Indian derivatives market and shared the profits earned with the shortseller.

On the other hand, US shortseller Hindenburg has continued to argue in defense of its report released in January 2023. Now further action will be taken after SEBI receives their replies from Hindenburg, Anderson and Kingdon.