Hindenburg Report: How US firm behind charges of irregularities against Adani, Sebi chief is making a killing
Vijay C Roy
Tribune News Service
Chandigarh, August 12
On Monday, Department of Economic Affairs Secretary Ajay Seth told reporters that the government had nothing further to add on the New York-headquartered Hindenburg Research on the Adani matter. He made his comments after the Securities and Exchange Board of India (Sebi) and its chairperson Madhabi Puri Buch issued their statements, a day before. On Sunday, Sebi and Madhabi rebutted fresh allegations made by Hindenburg Research. “Sebi has given a statement. The chairperson has also made a statement. There is nothing further to be added,” Seth said.
In its latest report, Hindenburg questioned the delay in Adani probe and Sebi’s objectivity in the matter, alleging Buch and her husband Dhaval Buch had investments in offshore funds connected to entities used by the Adani Group for market manipulation.
What is Hindenburg Research
US-based investment research firm Hindenburg Research is known for its investigative reports and short-selling strategies. The firm specialises in forensic financial research. The company focuses on uncovering accounting irregularities, unethical practices and undisclosed financial issues within companies across the world.
What is short-selling
Short selling is a trading strategy in the stock market where investors or traders speculate over a stock and expect its price to fall. The investors place their bets on a company’s stock, which they anticipate will fall at a specific time. It involves borrowing shares of a stock and selling them at the current market price, to buy them back later at a lower price.
The difference between the selling price and the buying price is the profit for the short seller. In India, all categories of investors, including retail and institutional investors are allowed to short-sell as it is recognised as a legitimate trading strategy under a framework by Sebi. Hindenburg Research made just over $4 million from its short-selling position on Adani stocks, Bloomberg reported.
