The Elara fund, known as Oyster Bay Fund Ltd., borrowed from Nomura for stock bets on Adani Enterprises Ltd. and Adani Ports & Special Economic Zone Ltd., according to Supreme Court filings from the case. Shares of those companies plummeted after a January 2023 report from Hindenburg Research accused Adani’s empire of “brazen stock manipulation” and alleged Elara was involved. Some of Nomura’s top bankers in Asia were alarmed and wanted to reduce the size of the loans, according to the bank’s defense filed on January 5. The Elara fund alleged that the bank had asked for $205 million in cash to repay debts, but then breached a repayment plan by selling Adani shares that had been pledged as collateral – a move that resulted in losses of $43 million. The Tokyo-based lender has denied any wrongdoing.
The case is part of the fallout from Hindenburg’s nearly 100-page report on Adani, which at one point eroded more than $150 billion in value from his Adani Group’s listed entities and prompted investigations from local regulators – including one involving Elara. Asia’s second-richest man dismissed the report as “baseless” and “nothing short of a calculated securities fraud.”
The documents also show how Nomura handled lending to its high-risk trading clients in 2023, two years after losing nearly $3 billion on similar trades with Archegos Capital Management.
Within days of the Hindenburg report, a group of Nomura’s top executives in Asia, including head of equity product sales Ajay Jain, co-heads of Asian markets sales Corrinne Teo and Charles Myong, and managing director Priyanka Khurana, gathered for a video call with Elara Chief Executive Officer Raj Bhatt to request a refund. “As just discussed on the phone, given the enormous volatility in the portfolio stocks, Nomura’s credit is very uncomfortable with the leverage on the portfolio and would like to withdraw it,” Khurana wrote in an email, according to the bank’s filings.
Nomura had helped the Elara fund gain “significant exposure” to the Adani companies through so-called total return swaps, the lender’s lawyers said. These are securities that allow the buyer to bet on stocks without owning them, while using borrowed money to increase potential profits. Banks that arrange these transactions typically require collateral, or margin, which they can seize and sell if the shares lose value and their loans are at risk.
Bloomberg“Nomura disagrees with Oyster Bay Fund’s claim and we will vigorously defend it,” a Nomura spokesperson said in an emailed statement.
Elara CEO Bhatt did not respond to multiple emails and phone calls seeking comment. One of the lawyers at the London office declined to comment on the case. A spokesperson for the Adani Group declined to comment.
Hindenburg’s report stated that two of Elara’s other investment funds had invested almost exclusively in various Adani shares, and alleged that these were a front for Adani itself. One fund had pumped about $3 billion into the stock – almost 99% of its market value – while 94% of the other fund’s assets had previously been exposed to the mogul’s empire, the report said.
Nomura’s lawyers cited Hindenburg’s allegations in their filing, noting that the short seller had claimed that some of Elara Capital’s funds “appeared to be backed by the Adani Group.”
In a 413-page rebuttal to Hindenburg’s allegations, Adani described “innuendo” about the Elara funds as “false” and declined to comment further on “the conduct of public shareholders.”
The Securities and Exchange Board of India, the country’s capital markets regulator, asked the Elara funds for explanations as part of an investigation into possible violations of disclosure norms, the Economic Times reported in 2024. The funds had not responded to requests for information, Reuters reported last May.
In September, SEBI said the evidence regarding Adani’s alleged third-party transactions and disclosures was insufficient to support fraud claims.
Elara, based in London and regulated by the U.K.’s Financial Conduct Authority, operates several financial services firms and investment funds, according to U.K. company filings. The company is majority owned by Bhatt and had about £98 million ($132 million) in shareholder money at the end of March 2025, the documents show.
When Elara first came into the spotlight following the Hindenburg report, Jo Johnson, a former Conservative Party minister and brother of ex-Prime Minister Boris Johnson, stepped down as director, saying the role required “greater domain expertise in specialist areas of financial regulation than I expected.”
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