New Delhi: The feud between American short seller Hindenburg Research and India's leading business house Adani Group has been going on for the last one and a half years. This war took a new turn on Sunday, when Hindenburg also implicated Madhavi Puri Buch, the chief of capital market regulator SEBI, on the issue of conflict of interest.

When did the Hindenburg-Adani dispute start?

Hindenburg Research released a report in January last year. In this, many serious allegations were made against Adani Group, such as increasing the price of shares in an unfair manner. After this report, there was a sell-off of $ 150 billion in the shares of Adani Group. The company repeatedly reiterated that it did nothing wrong, yet its stocks could not fully recover in 18 months.

Who are Gautam Adani and Hindenburg Research?

Gautam Adani, a resident of Gujarat, is a billionaire businessman. School drop-out Adani's business is spread across ports, power generation, airports, mining, renewable energy, cement and media. Before the Hindenburg Research report, he was the richest person in Asia. But, Hindenburg's report led to a huge decline in his net worth.

Talking about Hindenburg Research, it was founded in 2017 by Nathan Anderson. It is a forensic financial research company that does equity, credit and derivatives analysis. Hindenburg Research claims that it exposes companies doing wrongful work in the corporate world and earns money by taking short positions in the shares of those companies.

What was Hindenburg's allegation on Adani Group?

Last year, Hindenburg disclosed that it had held short positions in Adani Group companies through U.S.-traded bonds and non-India-traded derivatives. Hindenburg also released a report accusing the Adani Group of improperly using tax haven countries to inflate the price of its shares. It also raised concerns over the company's high debt. Adani Group called all the allegations baseless.

What happened after the Hindenburg Report?

After the Hindenburg Research report, investors started selling Adani Group companies in panic. This led to a decline of $150 billion in the overall market value of the group's listed companies. According to news agency Reuters, Adani Group shares are still about $35 billion below the levels before the Hindenburg report, but they have made a smart recovery. SEBI had also issued a show cause notice to Hindenburg Research in this matter.

What are the latest allegations from Hindenburg Research?

Hindenburg, in a report published on Saturday, alleged that Sebi Chairperson Madhavi Puri Buch and her husband Dhaval Buch had invested in an offshore fund that the Adani Group was allegedly using to manipulate the stock market. Citing whistleblower documents, Hindenburg alleged that the Buch couple invested in one in 2015 and exited in 2018.

Hindenburg is actually trying to link the Buch couple's investments and the alleged sluggish investigation of Adani Group's offshore fund. The American short seller said in its report, "We are not at all surprised that SEBI did not want to pursue the investigation based on clues that could lead it to its chairman." The 10 listed firms of the Adani Group suffered a combined initial loss of $ 11 billion in market capitalization on Monday compared to Friday's close.

How did Sebi and Butch react?

SEBI Chief Madhavi Puri Buch issued a statement responding to Hindenburg's allegations. She said that the investments were made in her personal capacity before she took over as SEBI chief and all necessary disclosures were made. The fund in which Buch had invested, IPE-Plus Fund 1, issued a separate statement saying that it had not invested in any shares of the Adani Group.

At the same time, a spokesperson of market regulator SEBI reiterated Buch's words in an official statement and appealed to investors to remain calm. The spokesperson also advised to look at all aspects before reacting to reports like Hindenburg.