Did not make huge profit from Adani short sell, says Hindenburg
Did not make huge profit from Adani short sell, says Hindenburg
US-based short seller Hindenburg Research revealed that it earned $4.1 million in revenue from gains made by shorting Adani securities on behalf of its client. However, it said that this amount will barely cover the costs of producing the research.
"We have made ~$4.1 million in gross revenue through gains related to Adani shorts from that investor relationship. We made just U.S.~ $31,000 through our own short of Adani U.S. bonds held into the report," said Hindenburg stated in a blog post.
This statement was made in response to a show-cause notice issued by the Securities and Exchange Board of India (Sebi).
"After accounting for legal and research expenses, including time, salaries, compensation, and costs for a 2-year global investigation, we may only break even on our Adani short," Hindenburg explained.
Contrary to reports suggesting that Hindenburg had 12-16 investor partners who made millions of dollars, the short seller clarified, "The reality, as detailed in the show-cause notice, is less dramatic. We only had one investor relationship in our Adani thesis, as is customary for our approach and as we have discussed in multiple public interviews."
Hindenburg mentioned that its work exposing the Adani Group was not financially justifiable and carried significant personal risk and safety concerns.
"But, to date, our research on Adani is by far the work we are most proud of," it said.
The US-based company said that Sebi is neglecting its responsibilities, suggesting that it has been more focused on protecting those committing fraud rather than safeguarding investors.
"In our view, SEBI has neglected its responsibility, seemingly doing more to protect those perpetrating fraud than to protect the investors being victimised by it," saidHindenburg in its blog post.
"The incentives are clear: The gains from fraudulent activities outweigh the small risks of a potential 'slap on the wrist' fine from regulators. And based on the hundreds of tips and leads we received following the Adani report, Adani is by no means the only ongoing issue that Sebi has failed to address," Hindenburg added.
Watch Live TV in English
Watch Live TV in Hindi