KOTAK MAHINDRA BANK SHARES FALL 3.8% AMID ADANI-HINDENBURG SAGA

Kotak Mahindra Bank shares: Shares of Kotak Mahindra Bank plummeted by as much as 3.8 per cent in intraday trading after Hindenburg Research mentioned the bank’s investment arm, Kotak Mahindra Investments Limited (KMIL), and its founder Uday Kotak in a response to a Securities and Exchange Board of India (SEBI) show-cause notice.

The bank's stock dropped from today’s high of Rs 1,820 to Rs 1,739.30, losing approximately 70 points or 3.84 per cent by 1:00 PM on July 2.

Hindenburg Research, the US-based short seller known for its report alleging financial irregularities within the Adani Group, recently received a show-cause notice from SEBI. In its reply, Hindenburg accused SEBI of vaguely referring to Kotak Mahindra Investments Limited as KMIL without clearly identifying its role in the dealings.

Hindenburg stated, "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."

The research firm claimed that Kotak Mahindra Investments Limited "created and oversaw the offshore fund structure" used by Hindenburg’s investor partner to bet against Adani. Hindenburg accused SEBI of masking Kotak's name under the acronym 'KMIL,' merely referring to the K-India Opportunities fund.

For the first time in its responses, Hindenburg named Uday Kotak, the founder and former CEO of Kotak Mahindra Bank, suggesting that SEBI is attempting to downplay the involvement of its former Corporate Governance Chief in the Adani short-selling bets to "protect yet another powerful Indian businessman."

“Uday Kotak, founder of the bank, personally led SEBI’s 2017 Committee on Corporate Governance. 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,” Hindenburg said.

Shares of Kotak Mahindra Bank continue to experience volatility as the market reacts to these unfolding developments.

2024-07-02T08:21:12Z dg43tfdfdgfd