NEW DELHI: The Enforcement Directorate investigation has revealed that 12 entities profiteered by short-selling Adani Group stocks ahead of the publication of the Hindenburg Report. Sources said that out of these 12, three entities are based out of India, while one is an Indian branch of a foreign bank.
Sources further said that four entities, which made gains by short-selling Adani Group stocks, are based in Mauritius and one each in France, Hong Kong, the Cayman Islands, Ireland and London. Sources told TNIE that two of the three Indian entities are based in Delhi, while another one is from Mumbai.
According ED investigation, short sellers made a profit by selling the stock prior to the release of the Hindenburg report and squared off their positions by buying cheaper after stock prices had fallen sharply following the release of the Hindenburg report.
Between January 24, 2023, and February 27, 2023, the market capitalization of the Adani stocks saw significant erosion estimated to be around Rs. 12.4 lakh crores (or nearly USD 150 billion) in value terms.
Securities and Exchange Board of India (Sebi), which is investigating various allegations levelled by the Hindenburg Report against the Adani group, is also looking into unusual trading patterns in Adani Group stocks pre- and post-Hindenburg Report.
Sebi in its report submitted to the Supreme Court has said that it has investigated such unusual trading patterns for the period from 18 January 2023 to 31 January 2023. The Hindenburg report was released on 24 January.
In this matter alone, Sebi has examined over 100 documents with over 5,000 pages and recorded statements from seven persons.
ED had earlier shared its findings with the Expert Committee set up by the Supreme Court. In its report, the Expert Committee said that ED had found potentially violative selling by specific parties and that this may lead to credible charges of concerted destabilization of the Indian markets, and SEBI ought to be probing such actions under securities laws.