Chinese Involvement in Hindenburg Report? Senior Lawyer Jethmalani’s Claim Adds Intrigue to Adani Saga

In a sensational revelation, senior lawyer Mahesh Jethmalani has alleged that a businessman with Chinese connections commissioned the controversial report by short-seller Hindenburg Research, which led to a significant drop in Adani Group shares in January 2023. According to Jethmalani, Chinese spy Anla Cheng and her husband Mark Kingdon hired Hindenburg to produce the report on Adani. They allegedly used Kotak Mahindra Investments Limited (KMIL) to set up a trading account for short-selling Adani shares, profiting millions from their activities. These actions substantially eroded Adani’s market cap, causing financial harm to many Indian retail investors. It is important to note that these claims have not been independently verified by ET Online.

Historical Context

The Adani Group, a major Indian multinational conglomerate, has been a significant player in various strategic international projects, often competing with Chinese firms. The group’s involvement in projects like the Haifa Port in Israel and coal projects near Sri Lanka’s Jaffna has positioned it as a competitor to Chinese interests. The allegations by Jethmalani suggest that the actions of Cheng and Kingdon were motivated by a desire to undermine Adani’s competitive edge in these strategic areas.

Key Allegations

1. Chinese Strategic Interests: Jethmalani claims that the actions of Cheng and Kingdon were aimed at promoting Chinese strategic interests by undermining an Indian corporate competitor.
2. Financial Manipulation: The duo allegedly used KMIL to set up a trading account for short-selling Adani shares, profiting millions and causing significant financial harm to Indian retail investors.
3. Political Angle: Jethmalani also suggested that these activities were supported by the INDIA bloc under the guise of opposing “crony capitalism.”

Details on Anla Cheng

Jethmalani provided more details about Anla Cheng, stating that she was the CEO of SupChina, a pro-China media initiative that later became The China Project. This entity was accused of news subversion in China’s interest, leading to its shutdown after calls for an investigation by some US senators.

Questions Raised

Jethmalani posed several questions regarding the involvement of various entities and individuals:

1. Introduction to KMIL: Who introduced the Kingdons to KMIL, and what due diligence was conducted by KMIL regarding the Kingdons?
2. Participation in Short-Selling: Did KMIL participate in the short sell as a principal?
3. Indian Involvement: Were Indian people, organizations, and entities who helped Hindenburg aware of the short-selling plan, and did they benefit from it?

Hindenburg’s Response

Hindenburg had alleged that while the markets regulator SEBI struggled to claim jurisdiction over them, its notice failed to name Kotak Bank, which allegedly created and oversaw the offshore fund structure used by their investor partner to bet against Adani. Kotak Mahindra (International) Ltd, a unit of Kotak Mahindra Bank, responded by stating that Hindenburg was never a client of the group’s K-India Opportunities Fund (KIOF) and Kotak Mahindra International Ltd (KMIL).

Summary

• Allegations: Chinese spy Anla Cheng and her husband Mark Kingdon hired Hindenburg to produce a damaging report on Adani.
• Financial Impact: Their actions led to significant financial harm to Indian retail investors.
• Strategic Interests: The motive was allegedly to promote Chinese strategic interests by undermining Adani.
• Political Angle: The INDIA bloc allegedly supported these activities under the guise of opposing “crony capitalism.”
• Questions Raised: Jethmalani posed questions about the involvement of KMIL and Indian entities in the short-selling plan.
• Hindenburg’s Response: Hindenburg denied any direct client relationship with Kotak’s K-India Opportunities Fund.

This article provides a comprehensive overview of the allegations and the historical context, making it a valuable resource for students preparing for competitive exams.