Kotak Mahindra Bank share price today: Shares of Kotak Mahindra Bank fell by up to 2% to a day’s low of Rs 1,768 on the BSE after Hindenburg Research, a US-based activist investor, accused the bank of creating and overseeing an offshore fund structure used to bet against Adani stocks.
According to an ET report, this accusation came to light via a show cause notice purportedly issued by Sebi and publicly released by Hindenburg.
The show cause notice lists K-India Opportunities Fund, run by Kotak, among six entities, the ET report said. Hindenburg pointed out that while SEBI attempted to establish jurisdiction over Hindenburg, the notice did not mention Kotak Bank or its connection to India.
“While SEBI seemingly tied itself in knots to claim jurisdiction over us, its notice conspicuously failed to name the party that has an actual tie to India: Kotak Bank, one of India’s largest banks and brokerage firms founded by Uday Kotak, which created and oversaw the offshore fund structure used by our investor partner to bet against Adani,” Hindenburg stated in a blog post response to SEBI’s notice.
Hindenburg also brought attention to Uday Kotak, the bank’s founder, who led Sebi’s 2017 Committee on Corporate Governance.
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“We suspect Sebi’s lack of mention of Kotak or any other Kotak board member may be meant to protect yet another powerful Indian businessman from the prospect of scrutiny, a role Sebi seems to embrace,” it said.
Shares of Kotak Mahindra Bank have faced additional pressure from these revelations, having only increased by 4% over the last three years, significantly underperforming the Sensex, Nifty, and most peers.
While Hindenburg did not name the investor who allegedly worked with Kotak, it addressed previous media reports suggesting multiple investor partners in their Adani work.
“Prior media have cited sources close to SEBI and the ED who implied that we had 12 or even 16 investor partners in our Adani work…We only had one investor relationship in our Adani thesis, as is customary for our approach and as we have discussed in multiple public interviews,” Hindenburg clarified, adding that the high cost of conducting a two-year global investigation meant they might barely break even by shorting Adani stocks.