Sebi pressured brokers to close Adani short positions, will file RTI: Hindenburg
US-based Hindenburg Research criticized Sebi's show cause notice alleging violations of Indian securities laws as "nonsense" and claimed it was concocted to fulfill a predetermined agenda. The investment management firm led by Nate Anderson is currently initiating the process of filing a Right to Information (RTI) request to obtain the names of Sebi employees involved in both the Adani and Hindenburg matters.
While describing 's show cause notice on violating Indian securities laws as "nonsense, concocted to serve a pre-ordained purpose", US-based on Tuesday alleged that the market regulator pressured brokers to close their short positions in Adani stocks."Following our report, we were told that SEBI pressured brokers behind the scenes to close short positions in Adani under the threat of expensive, perpetual investigations, effectively creating buying pressure and setting a ‘floor’ for Adani’s stocks at a critical time," said while training guns on the regulator.
The Nate Anderson-led investment management firm is now in the process of filing an seeking the names of Sebi employees who worked on both the Adani matter and the Hindenburg matter, along with basic details on meetings and calls between Sebi and Adani and its various representatives.
"We will await Sebi's response on whether it will provide basic transparency on its investigations," it said, adding that the regulator's 46-page notice did not identify any factual inaccuracy in its explosive report which caused a $150 billion shock in Adani stocks last year.
While accusing Sebi of neglecting its responsibility, seemingly doing more to protect those perpetrating fraud than to protect the investors being victimized by it, Hindenburg said it may try to impose bans or fines on us to clamp down on the prospect of more criticism of Indian companies.
"Regardless of these intimidation efforts, we will continue to speak up about malfeasance at companies anywhere across the globe if it is warranted by the evidence," the research firm said, while claiming that it is hardly at a break-even point when it comes to making money from Adani shorts.
Although it made $4.1 million in gross revenue through gains related to Adani shorts from a client, considering all the legal and research expenses (including time, salaries/compensation, and costs for a 2-year global investigation), Hindenburg said that it may come out ahead of breakeven on Adani shorts.
Source: Stocks-Markets-Economic Times
