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Beyond Kotak, is there a China connection to the Hindenburg exposé on Adani?

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Synopsis

Social media is rife with claims that the wife of Mark Elliot Kingdon, the man on whom the spotlight fell following Sebi's revelations, has had ties with the Chinese Communist Party and thus China could be another actor in the Hindenburg saga.

The Hindenburg case took a sharp turn when market regulator Sebi recently shot off a notice to American short-seller Hindenburg Research as part of the investigation it launched last year into the trading activities surrounding Adani Enterprises Ltd., after Hindenburg published a damning research report on Adani, accusing it of several wrong-doings. Hindenburg has published the Sebi notice and accused it of trying to muzzle critics.

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Sebi's notice introduced two new actors into the Hindenburg saga, a hedge fund and an Indian bank. The notice showed for the first time that Hindenburg shared its Adani research exclusively with Kingdon Capital Management LLC, a New York hedge fund, before it was published, and that the two firms had a profit-sharing deal. It also revealed that Kingdon used Kotak Mahindra Bank to carry out the trades.

But that's not all. After Sebi's revelations became public, the spotlight has now fallen on Mark Elliot Kingdon, the founder of Kingdon Capital — and his wife, Anla Cheng.


Social media is rife with claims that Kingdon's wife has had ties with the Chinese Communist Party and thus China could be another actor in the Hindenburg saga. Senior lawyer and Rajya Sabha member Mahesh Jethmalani has called Cheng an "accomplished Chinese spy" in a post on X.

Who is Anla Cheng?
Anla Cheng is a fund manager, investor, media personality and philanthropist. Chinese-born and raised in Japan, she has been an investor in China for over 20 years, as per the website of KCY Family Office LLC, a firm she founded. She started her career at Goldman Sachs and then moved onto Citigroup. She ran a Family Office of Asian Hedge Fund of Funds, Centenium Capital. She also worked at Robert Fleming as SVP of Asia Institutional Group.

Cheng hit the limelight after she founded SupChina in 2016, an independent China business, digital news and events platform, one of the few independently funded English-language publications to cover China in depth for Western audiences. It was renamed The China Project in 2022 when the US-China relations had deteriorated. Its products included the popular China news and society-themed Sinica podcast, articles on a wide range of China-themed topics on its website, a business intelligence data product "ChinaEDGE" and organising conferences. Cheng's media venture was accused of ties with groups and individuals associated with the Chinese Communist Party. The China Project was shut down last year for lack of funds.
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Why was Anla Cheng accused of links to the CCP?
Cheng's troubles began when a whistleblower complaint to the US Congress prompted Republican calls to investigate The China Project which was accused of being a China agent. In a sworn statement, Shannon Van Sant, a journalist who had reported from China and later worked briefly as business editor at The China Project, alleged that The China Project was influenced by the Chinese government and acting as an agent of a foreign principal under federal law. Her lawyers said she made the sworn statement in the interest of US national security.

Van Sant's lawyers at the non-profit firm Whistleblower Aid sent the complaint to the Department of Justice, the Securities and Exchange Commission, and Congress. News website Semafor obtained it from a source on Capitol Hill, where Van Sant’s case was taken up by two leading China hawks, Republican Senator Marco Rubio and Rep. Chris Smith.
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“Shannon Van Sant’s revelations underscore the extent to which Xi Jinping’s China seeks to shape narratives, corrupt the media and subvert truth-tellers,” the two legislators had told Semafor in an emailed statement.

"The incendiary charge directed at The China Project, which often represents the pro-engagement side of the U.S. debate, would group them with state-controlled media like the news service Xinhua and Russia’s RT. Foreign Agent registration isn’t a ban, but it’s a scarlet letter that brings with it cumbersome reporting requirements," said the Semafor report.
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The China Project claimed that Van Sant was removed for bad performance. On accusations against The China Project, its Editor-in-Chief Jeremy Goldkorn said, "We have been accused by U.S. Senator Marco Rubio of being unregistered agents of the CCP. Meanwhile, the CCP has blocked us in China and we are officially labeled as U.S.-backed "anti-China forces"."

"We have been so consistently critical of China that we are banned there, and often attacked by Communist Party mouthpieces," Goldkorn said. He further said, "Ms. Van Sant’s complaint does not allege a source, vehicle, vector, or mechanism for the claimed CCP influence. It rests entirely upon her subjective observations from the less than 90 days she spent working at our company."

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Van Sant's lawyers claimed in a statement that The China Project’s assertion that Van Sant was terminated for poor performance was categorically false. "As detailed in her declaration (published by Semafor on October 30, 2022) Ms. Van Sant attested that the organization’s leadership told her that she was being “let go” because she was “not in alignment” in advancing the “narrative” the organization wanted to propagate about topics and issues related to China. Moreover, internal documents establish that The China Project was prepared to offer Ms. Van Sant a generous severance package, subject to her signing a confidentiality agreement," they claimed.

Bad name that Van Sant's statement brought to The China Project finally led to its shutting down.

Was the Hindenburg hit a reaction to Adani's challenge to China?
The China connection to the Hindenburg case is easy to allege since the Adani Group has been competing against Chinese interests. Jethmalani wrote on X that China "clearly has a bone to pick with the Adani group". He had earlier written that the Adani Group was "an Indian multinational that had successfully on merit thwarted China's global outreach by winning contracts against Chinese bids".

While only a thorough probe can establish whether Anla and Mark Kingdon had really any link to China and whether they were influenced by China to carry out a hit job against the Adani Group with the help of Hindenburg Research, it is a fact that Adani is widely seen as a challenger to China outside India.

Adani is developing a terminal at Colombo port where China already runs one. Adani's investment is seen as a counter to the stranglehold China gained over Sri Lanka with its debt traps over the years. The US is investing more than half a billion dollars in the port terminal being developed by Adani. The financing by the American government's International Development Finance Corporation (DFC) is seen as the US backing Indian interests in Sri Lanka to curtail China’s influence in South Asia. This is the biggest investment so far in Asia by the DFC.

Adani also operates the Haifa Port in northern Israel along with a local company after it completed its purchase for $1.03 billion in January 2022. Haifa is one of the main seaports in Israel, where about 99% of all goods move in and out of the country by sea. This too was seen as a move to curtail China's influence. China's Shanghai International Port Group already operates a port at Haifa.

Haifa is a major trade hub on the Mediterranean that gives access to European markets. It will boost trade lanes with the company's Indian ports and could better connect Europe and the Middle East in the longer term.

China got a port in Haifa in 2021 to strengthen its BRI project. Adani buying another port close by may not only boost India's trade ambitions but actually prove to be a counter to the BRI as the proposed India-Middle East-Europe Economic Corridor (IMEEC), of which Adani's port will be a crucial part, is seen by many as a challenge to China's BRI.

Adani's new port in Kerala at Vizhinjam too will help India compete with China in terms of both trade and manufacturing. Located near the southernmost tip of the country, the Vizhinjam transshipment container port — the first of its kind in India — will allow India to grab a bigger slice of the international maritime trade currently dominated by China. The Vizhinjam port will also be a boost to India's ambitions to become an alternative manufacturing destination to China.
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