Hindenburg Gets Show Cause From SEBI, Research Firm Calls It 'Nonsense'
(MENAFN- AsiaNet News) US-based short seller Hindenburg Research said that it has received a show cause notice from the Securities and Exchange Board of India (SEBI) on June 27, outlining suspected violations of Indian regulations.
The show cause notice was deemed "nonsense" by the short seller.
"We are sharing the entirety of this notice today, frankly because we think it is nonsense, concocted to serve a pre-ordained purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India," stated Hindenburg Research in a blog post.
The New York-based firm, in a statement, said it had while putting out the report that alleged“brazen stock manipulation and accounting fraud scheme over the course of decades” at the Adani group, disclosed that it was short on Adani (meaning it had anticipated a fall in the value of stock and thus traded on it).
The regulator has alleged that Hindenburg and Anderson have violated regulations under the SEBI Act, SEBI's Prevention of Fraudulent and Unfair Trade Practices regulations, and SEBI's Code of Conduct for Research Analyst regulations.
On the SEBI notice, it said,“Much of the notice seemed designed to imply that our legal and disclosed investment stance was something secret or insidious, or to advance novel legal arguments claiming jurisdiction over us. Note that we are a US-based research firm with zero Indian entities, employees, consultants or operations.”
The regulator, it said, claimed that the disclaimers in the report were misleading because the firm was“indirectly participating in the Indian securities market.”
Hindenburg continues to defend its January 2023 report.
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