SEBI begins hearings to recover gains linked to Adani-Hindenburg trades: Report
SEBI has begun hearings in a case involving suspected use of prior knowledge of Hindenburg Research’s Adani report to profit from short-selling trades, Reuters reported. The regulator is also seeking to protect assets held in Mauritius as it moves to recover the alleged gains.
- Sep 4, 2026,
- Updated Sep 4, 2026 5:05 PM IST
The Securities and Exchange Board of India (SEBI) has begun hearing representations from parties involved in trades that it suspects were based on prior knowledge of Hindenburg Research’s 2023 report on the Adani Group, according to two people familiar with the matter, Reuters reported.
SEBI had said in 2024 that US-based Kingdon Capital Management took short positions in Adani-related stocks through a Mauritius-based fund linked to Kotak International ahead of the Hindenburg report.
Short selling involves borrowing shares and selling them, with the intention of buying them back later at a lower price and keeping the difference as profit.
SEBI seeks recovery of alleged gains
Hindenburg’s January 2023 report accused the Adani Group of stock manipulation and accounting fraud, allegations the conglomerate denied. The report triggered a sharp selloff in Adani Group companies, erasing about $150 billion in market value at its lowest point.
SEBI subsequently dismissed Hindenburg’s allegations of stock manipulation against the Adani Group. However, the regulator separately examined whether certain investors had traded using non-public information about the report.
In 2024, SEBI outlined a profit-sharing arrangement between Hindenburg and Kingdon and said six entities had collectively made $22.25 million from short-selling trades linked to Adani stocks.
Hindenburg has previously rejected allegations of wrongdoing and called SEBI’s assertions “nonsense”. SEBI, Hindenburg, Kingdon Capital and Kotak did not respond to Reuters’ requests for comment.
Regulator presses ahead despite overseas proceedings
The latest hearings come more than two years after the trades, with the parties involved having taken time to respond to SEBI’s allegations, the people said. Although all the parties are based overseas, SEBI maintains that it has jurisdiction because the trades were executed in Indian securities markets.
The regulator is pursuing enforcement action on the grounds that the trades were based on non-public information, potentially violating rules designed to prevent fraud and market abuse, one of the people said.
The case could also have wider implications for SEBI’s ability to pursue alleged illicit gains held through overseas structures.
SEBI moves to protect fund assets
SEBI has opposed court-supervised insolvency proceedings in Mauritius involving K India Opportunities Fund Class F, the Mauritius-based vehicle through which the trades were executed, according to the people. The proceeds from the transactions went into the fund.
Reuters could not establish whether the gains were subsequently distributed or redeemed by Kingdon, which was a beneficiary of the fund.
After being informed about the insolvency proceedings, SEBI approached the court-appointed receiver in the first week of July and asked that the fund’s assets not be transferred or distributed before the regulator could issue an order seeking recovery of the alleged gains, along with interest.
Mauritius’ Supreme Court appointed the managing director of business advisory and restructuring firm Quantuma as receiver in June to oversee and safeguard the fund’s assets. Quantuma declined to comment.
The proceedings represent a relatively rare attempt by an Indian market regulator to pursue alleged gains involving offshore entities and assets held overseas.
The Securities and Exchange Board of India (SEBI) has begun hearing representations from parties involved in trades that it suspects were based on prior knowledge of Hindenburg Research’s 2023 report on the Adani Group, according to two people familiar with the matter, Reuters reported.
SEBI had said in 2024 that US-based Kingdon Capital Management took short positions in Adani-related stocks through a Mauritius-based fund linked to Kotak International ahead of the Hindenburg report.
Short selling involves borrowing shares and selling them, with the intention of buying them back later at a lower price and keeping the difference as profit.
SEBI seeks recovery of alleged gains
Hindenburg’s January 2023 report accused the Adani Group of stock manipulation and accounting fraud, allegations the conglomerate denied. The report triggered a sharp selloff in Adani Group companies, erasing about $150 billion in market value at its lowest point.
SEBI subsequently dismissed Hindenburg’s allegations of stock manipulation against the Adani Group. However, the regulator separately examined whether certain investors had traded using non-public information about the report.
In 2024, SEBI outlined a profit-sharing arrangement between Hindenburg and Kingdon and said six entities had collectively made $22.25 million from short-selling trades linked to Adani stocks.
Hindenburg has previously rejected allegations of wrongdoing and called SEBI’s assertions “nonsense”. SEBI, Hindenburg, Kingdon Capital and Kotak did not respond to Reuters’ requests for comment.
Regulator presses ahead despite overseas proceedings
The latest hearings come more than two years after the trades, with the parties involved having taken time to respond to SEBI’s allegations, the people said. Although all the parties are based overseas, SEBI maintains that it has jurisdiction because the trades were executed in Indian securities markets.
The regulator is pursuing enforcement action on the grounds that the trades were based on non-public information, potentially violating rules designed to prevent fraud and market abuse, one of the people said.
The case could also have wider implications for SEBI’s ability to pursue alleged illicit gains held through overseas structures.
SEBI moves to protect fund assets
SEBI has opposed court-supervised insolvency proceedings in Mauritius involving K India Opportunities Fund Class F, the Mauritius-based vehicle through which the trades were executed, according to the people. The proceeds from the transactions went into the fund.
Reuters could not establish whether the gains were subsequently distributed or redeemed by Kingdon, which was a beneficiary of the fund.
After being informed about the insolvency proceedings, SEBI approached the court-appointed receiver in the first week of July and asked that the fund’s assets not be transferred or distributed before the regulator could issue an order seeking recovery of the alleged gains, along with interest.
Mauritius’ Supreme Court appointed the managing director of business advisory and restructuring firm Quantuma as receiver in June to oversee and safeguard the fund’s assets. Quantuma declined to comment.
The proceedings represent a relatively rare attempt by an Indian market regulator to pursue alleged gains involving offshore entities and assets held overseas.