Hindenburg Research refutes the claims made by India's securities regulator, accusing it of colluding with a US asset manager to initiate a short position against Adani Group using undisclosed information, potentially violating the country's regulations. The Securities and Exchange Board of India (SEBI) issued a 46-page "show cause" notice to Hindenburg, shedding light on the allegations amid a saga that began when the American short seller raised concerns about Adani's business practices. The notice identifies six entities, including Hindenburg and Kingdon Capital Management, for breaching regulations under the Prevention of Fraudulent and Unfair Trade Practices act. Hindenburg swiftly dismissed the allegations as baseless. Despite requests for comment, Kingdon Capital Management remained silent, while Hindenburg avoided addressing its ties with the asset manager. Criticizing SEBI's handling of the case, Hindenburg accused the regulator of favoring fraudsters over victimized investors. SEBI acknowledged receiving information from the US Securities and Exchange Commission (SEC) during its investigation. Adani, who repeatedly denied the accusations, faced significant market value losses post the initial report by Hindenburg. However, the shares eventually rebounded. The show cause notice could potentially lead to financial penalties and the reimbursement of any illicit gains. Hindenburg disclosed revenue of $4.1 million from its investor relationship regarding Adani shorts, highlighting minimal earnings from its Adani US bond short position. SEBI's allegations point to Hindenburg collaborating with Kingdon Capital Management by sharing an advance copy of its Adani report. Subsequently, Kingdon Capital established a fund capable of trading Indian equities and initiated short positions in Adani stocks before Hindenburg's report went public. Kingdon Capital, with $639.2 million in assets under management, operates global long-short equities and healthcare strategies. Moreover, a Mauritius-based unit of Kotak Mahindra Bank facilitated the creation of an offshore fund structure for betting against Adani's shares, unbeknownst to the K India Opportunities Fund or Kotak Mahindra International. Despite receiving the notice of allegations, no regulatory action has been taken against the fund. The stock value of Kotak Mahindra Bank dipped considerably following these revelations.