Kotak Mahindra International Limited (KMIL) clarified that Hindenburg Research has never been a client or investor in their fund on Tuesday.
This clarification comes after Hindenburg Research brought up the name of Kotak Mahindra Bank in its response to a show-cause notice from the Securities and Exchange Board of India (Sebi).
“Kotak Mahindra International Limited (KMIL) and KIOF unequivocally state that Hindenburg has never been a client of the firm nor has it ever been an investor in the Fund," said the company.
"The Fund was never aware that Hindenburg was a partner of any of its investors. KMIL has also received a confirmation and declaration from the Fund’s investor that its investments were made as a principal and not on behalf of any other person," it added.
The company said that K-India Opportunities Fund Ltd. (KIOF) follows strict Know Your Customer (KYC) procedures when bringing on new clients.
The company ensures that all investments comply with the relevant laws. They stressed that KIOF is a Sebi-registered Foreign Portfolio Investor and is regulated by the Financial Services Commission of Mauritius. Established in 2013, the Fund aims to help foreign clients invest in India.
“K- India Opportunities Fund Ltd. (KIOF) is a SEBI registered Foreign Portfolio Investor and is regulated by the Financial Services Commission of Mauritius. The Fund, was established in 2013 to enable foreign clients to invest in India. The Fund follows due KYC procedures while onboarding clients and all its investments are made in accordance with all applicable laws. We have cooperated with regulators in relation to our operations and continue to do so," it stated.
US-based short seller Hindenburg Research revealed that it earned $4.1 million in revenue from gains made by shorting Adani securities on behalf of its client. However, it said that this amount will barely cover the costs of producing the research.
"We have made ~$4.1 million in gross revenue through gains related to Adani shorts from that investor relationship. We made just U.S.~ $31,000 through our own short of Adani U.S. bonds held into the report," said Hindenburg in a blog post.
This statement was made in response to a show-cause notice issued by the Securities and Exchange Board of India (Sebi).
