Hindenburg gets letter from Sebi about Adani short bet

The said it made $4.1 million in gross revenue through "gains related to Adani shorts from that investor relationship" and just $31,000 through its short position of Adani's U.S. bonds. It did not name the investor.

Characterizing the Securities and Exchange Board of India's (SEBI) "show cause" notice as attempted intimidation, Hindenburg wrote that the regulator had made the "nebulous allegation" that Hindenburg's report contained misrepresentations and inaccurate statements meant to mislead readers.

"In our view, SEBI has neglected its responsibility, seemingly doing more to protect those perpetrating fraud than to protect the investors being victimized by it," Hindenburg said.

SEBI, and Kotak did not immediately respond to a request for comment outside working hours.

SEBI has also been probing Adani, but India's top court has given it till August 14 to complete its investigation.

The disclosure of the adds a new twist in the saga unleashed last year when Hindenburg, founded by Nathan Anderson, alleged improper business dealings by Adani.

The group, which refuted the allegations, suffered a loss of as much as $150 billion in combined market value after the report, but has since rebounded.

Hindenburg's response also sheds some new light on the mechanics of its trade, the details of which had intrigued other investors because Indian securities rules make it hard for foreigners bet against companies there.

"It was a tiny position," it said. "But, to date, our research on Adani is by far the work we are most proud of."

(Reporting by Urvi Dugar in Bengaluru and Juby Babu in Mexico City; Editing by Krishna Chandra Eluri and Stephen Coates)