(Updates with latest allegations from Hindenburg, regulator's

response)

NEW DELHI/MUMBAI, Aug 12 (Reuters) -

An 18-month battle between Hindenburg Research and India's

Adani Group

has taken a fresh turn with the U.S. based short-seller

alleging

over the weekend that the chief of the country's market

regulator has a conflict of interest in the matter.

The Securities and Exchange Board of India (SEBI) has

been investigating the group after Hindenburg Research's

report

in January last year set off an over $150 billion selloff

in the conglomerate's stocks despite the company's denials of

wrongdoing. The stocks have since recovered partially.

Here are some facts about billionaire Gautam Adani, his

group and Hindenburg's allegations.

WHO ARE ADANI AND HINDENBURG?

Gautam Adani built his empire after starting out as a

commodities trader. India's Prime Minister Narendra Modi is from

the same state as Adani, Gujarat, and their relationship has

long come under scrutiny by Modi's opponents.

Before Hindenburg's report, Adani, a school drop-out,

rose to become Asia's richest person, with businesses across

ports, power generation, airports, mining, renewables, media and

cement.

Hindenburg Research was founded in 2017 by Nathan Anderson.

It is a forensic financial research firm which analyses equity,

credit and derivatives. It has a track-record of finding

corporate wrongdoings and placing bets against the companies.

WHAT DID HINDENBURG AND ADANI SAY?

Hindenburg disclosed last year it held short positions in

Adani companies through U.S.-traded bonds and non-India-traded

derivatives. It released a report that alleged Adani improperly

used tax havens and flagged concerns about high debt levels at

the company.

The Adani group called the report baseless and termed the

allegations "unsubstantiated speculations".

WHAT HAPPENED AT ADANI AFTER HINDENBURG REPORT?

Hindenburg's report sparked a $150 billion meltdown in

shares of Adani's publicly listed companies last year. Although

the shares are still roughly $35 billion down from levels before

the Hindenburg report, they have staged a smart recovery.

That's partially because the ports-to-power conglomerate

welcomed investors like Abu Dhabi conglomerate International

Holding and investment firm GQG to shore up confidence

by diluting some of the family's tight shareholding.

In July, Adani Energy Solutions became the first group

company to return to the equity capital market, raising $1

billion. The group's flagship Adani Enterprises is also

considering raising funds, Reuters reported earlier this month.

WHAT IS HINDENBURG's LATEST ALLEGATION?

In a report published on Saturday, Hindenburg alleged

that Madhabi Puri Buch, the chaiperson of SEBI, and her husband

previously held investments in offshore funds also used by the

Adani Group.

It says the Bermuda-based Global Opportunities Fund,

which the Financial Times said was used by entities connected to

Adani Group to trade in the shares of group companies, had

sub-funds. Citing whistleblower documents, Hindenburg alleges

Buch and her husband invested in one of these sub-funds in 2015

and exited in 2018.

Hindenburg is trying to link this investment to what it

argues is the slow pace of action against the Adani Group and

offshore funds used by it.

"We find it unsurprising that SEBI was reluctant to

follow a trail that may have led to its own chairperson," the

short-seller said in its report.

Adani Group's 10 listed firms lost a combined $11

billion in market capitalisation on Monday compared to Friday's

close.

HOW DID BUCH AND SEBI RESPOND?

In two separate statements issued, Buch said the

investments were made in a personal capacity before she took

over as chief of SEBI and that all necessary disclosures had

been made.

The fund in which Buch invested, IPE-Plus Fund 1, issued

a separate statement saying it had not invested in any shares of

the Adani Group.

A formal

statement

from the spokesperson of the regulator reiterated Buch's

position and asked investors to remain calm and exercise due

diligence before reacting to reports such as that by Hindenburg.

Updating on the status of the investigation into the

Adani Group, the regulator said that it had concluded its probe

into 23 out of 24 matters. Six Adani Group companies have

disclosed

to stock exchanges that they have received show cause

notices from the regulator. A show cause notice signals an

intention by to take disciplinary action if satisfactory

explanations are not provided.

A show cause notice has also been issued to Hindenburg

for violating Indian rules, which was made

public

by the short-seller in July.

(Writing by Bansari Mayur Kamdar and Ira Dugal; Editing by

Aditya Kalra and Raju Gopalakrishnan)