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SEBI urges calm amid Hindenburg report, points investors to ‘short positions’ disclaimer
Hindenburg claimed that SEBI chief's conflicts of interest prevented the regulator a thorough probe into stock market manipulation charge against Adani Group.
India’s market regulator Securities and Exchange Board of India on Sunday urged investors to remain calm and conduct due diligence before reacting to the latest report by Hindenburg Research, noting that it includes a disclaimer that the US short-seller may hold short positions in the securities covered.
Hindenburg Research has accused SEBI chief Madhabi Puri Buch of conflicts of interest which it said prevented a thorough examination of manipulation and fraud claims at the Adani Group.
“Investors should remain calm and exercise due diligence before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report,” SEBI said in a statement.
Read: SEBI chief Madhabi Puri Buch, husband call Hindenburg allegations 'malicious, motivated’| 10 points
The Hindenburg report, released on August 10, claimed that SEBI had failed to take action against the Adani Group, despite allegations of financial irregularities. It also questioned SEBI's decision to issue a show-cause notice to Hindenburg on June 27, 2024, alleging violations of Indian securities laws. The report further alleged that recent amendments to SEBI (REIT) Regulations 2014 were made to benefit a specific multinational financial conglomerate.
SEBI’s response refuted these claims, asserting that the regulator had conducted thorough investigations into the Adani Group. The regulator pointed to the Supreme Court's January 3 order which noted that SEBI had completed 22 out of 24 investigations into the Adani Group.
Read: ‘Pathetic damp squib’: Why Mahesh Jethmalani is furious at Hindenburg report on SEBI chief
By March 2024, one more investigation was completed, and the remaining inquiry is close to conclusion, it said.
Addressing the show-cause notice issued to Hindenburg Research on June 27, 2024, SEBI said that the notice followed due process of law.
“It may be noted that pursuant to the completion of investigations, SEBI initiates enforcement proceedings which are quasi-judicial in nature. This comprises issuing of show cause notice and giving of opportunity of hearing which culminates in the passing of a speaking order,” SEBI stated.
