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What is Kotak Mahindra’s role in the Hindenburg-Adani case? Understand the whole game here

Sagar Patel

By Sagar Patel

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What is Kotak Mahindra’s role in the Hindenburg-Adani case? Understand the whole game here

Hindenburg came under the SEBI scanner after raising questions about Gautam Adani’s Adani Group. Due to which, recently, India’s market regulator SEBI had issued a 46-page show-cause notice to US-based research firm Hindenburg Research. Hindenburg is yet to give an official response on the matter but gave a clarification through a blog post on July 1. In this, the name of Indian bank Kotak Mahindra has surfaced. However, Kotak Bank has also submitted its clarification on the name. In such a situation, what is the role of Kotak Mahindra in the Hindenburg-Adani case?

SEBI accused Hindenburg

SEBI accused Hindenburg of handing over its report on Adani Group to a company called Kingdon Capital Management before publishing it. Kingdon then used it to bet against Adani shares. He shorted the stock. SEBI claims that Kingdon made $22.25 million, or roughly Rs 185 crore, in this way.

Hindenburg rejected these allegations and said that this was done to intimidate him. On the contrary, he accused SEBI of protecting fraudsters rather than investors. In the same series, Hindenburg also alleged that after the Hindenburg report was published, a unit of Kotak Mahindra bank in Mauritius had allowed an unknown investor to invest in Adani shares. to take advantage of the continued decline. The role of the bank in this was to create an offshore fund for the anonymous investor. With the intention that profits could be made.

Amidst these allegations, SEBI has tried to hide the name of Kotak Mahindra Bank. Uday Kotak’s established brokerage firms created an offshore fund structure, which was used by his investment partners to trade shares of the Adani Group. SEBI deliberately wrote the name ‘Kotak’ in abbreviated form as ‘KMIL’ in the notice. KMIL stands for Kotak Mahindra Investment Limited.

What is the role of Kotak Bank?

The group’s statement was issued after Hindenburg Research named Kotak Mahindra Bank. Kotak Mahindra Group says that K-India Opportunities Fund (KIOF) is a foreign portfolio investor registered with SEBI and is regulated by the Mauritius Financial Services Commission. Moreover, Hindenburg was never a client of its firm’s K-India Opportunities Fund (KIOF) or entities associated with Kotak Mahindra International Limited (KMIL). Kotak Mahindra was not even aware that Hindenburg was a partner of one of its investors. However, it admitted that the fund had helped Kingdon Capital Management sell Adani shares. According to a report by The Mint, a Kotak Mahindra bank official even said that he came to know about the relationship between Hindenburg and Kingdon Capital only after Hindenburg’s blog.

The fund follows KYC rules

He also informed that the K-India Opportunities Fund was started in 2013 to provide foreign clients with an opportunity to invest in India. The fund follows proper KYC process while adding new clients and all its investments are made in accordance with applicable laws. We have cooperated with the regulator regarding our actions and will continue to do so. This statement by the group comes after the complaint made by Hindenburg in which it was said that Kotak Mahindra Bank and the brokerage firms set up by Uday Kotak had jointly prepared the structure of an offshore fund. This fund was used by an investor from the US-based Hindenburg Company to short-sell the shares of the Adani group.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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