New Delhi: Kotak Mahindra Bank shares fell by up to 2%, reaching a low of Rs 1,768 on the BSE, after Hindenburg Research made serious claims against the bank. The US-based activist investor said that Kotak Mahindra Bank set up an offshore fund to bet against Adani stocks. Hindenburg also pointed fingers at Uday Kotak, the bank’s founder, who led SEBI’s 2017 Committee on Corporate Governance.
According to Hindenburg Research, Kotak Mahindra Bank created and managed an offshore fund to short Adani stocks, causing the bank’s shares to drop. The situation got worse when Hindenburg made public a show-cause notice, allegedly from SEBI, naming the K-India Opportunities Fund—run by Kotak—as one of the six involved.
In a blog post, Hindenburg criticized SEBI for not naming Kotak Bank or any of its board members, even though they were allegedly involved. “SEBI’s notice failed to name the party actually tied to India, Kotak Bank, one of India’s biggest banks and brokerage firms founded by Uday Kotak,” Hindenburg said, suggesting SEBI might be protecting a powerful businessman.
This news adds more pressure to Kotak Bank shares, which have only risen by 4% over the last three years, underperforming compared to Sensex, Nifty, and most other banks.
Hindenburg did not reveal the investor who supposedly worked with Kotak. “Media reports suggested we had multiple investor partners in our Adani work, but we only had one, as is normal for us,” the firm explained. Despite the high costs of their two-year global investigation, Hindenburg mentioned they might break even from shorting Adani stocks.
