India regulator presses ahead against Hindenburg, others in Adani case, sources say

India's markets regulator, the Securities and Exchange Board of India (SEBI), has begun personal hearings to recover gains from trades it suspects were made with prior knowledge of Hindenburg Research's critical report on the Adani Group. Business Recorder, citing two people familiar with the matter, said the hearings follow a long delay, as the parties involved were slow to respond. SEBI argues it has jurisdiction because the trades were carried out in India, even though all the parties are based overseas.

SEBI alleges that Kingdon Capital Management, a U.S.-based firm, built short positions in Adani-related stocks through a Mauritius fund linked to Kotak International before Hindenburg's 2023 report appeared. The regulator said in 2024 that six entities earned $22.25 million from the short-selling trades, and the proceeds went into the fund. To protect those assets, SEBI has opposed court-supervised insolvency proceedings for the fund, while Mauritius' Supreme Court appointed a receiver in June to control its assets.

Adani Group has denied wrongdoing, and Hindenburg previously called SEBI's assertions nonsense. SEBI, Hindenburg, Kingdon and Kotak did not reply to requests for comment, and the case is widely seen as a precedent for pursuing offshore entities and recovering assets overseas.