Hindenburg Research: US firm that accused Gautam Adani’s company of fraud shuts down

Started in 2017, Hindenburg Research shot to fame for exposing alleged financial irregularities in some big-name businesses. The firm’s reports have led to businesses, both in India and abroad, losing billions of dollars in market value.

“Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs. We shook some empires that we felt needed shaking,” Mr Anderson wrote in the statement, external where he announced his decision.

In 2020, the company accused electric truck maker Nikola Corp of misleading investors about its technologies. In 2022, the company’s founder, Trevon Milton, was found guilty of lying to investors and convicted of fraud.

In 2023, it published a report accusing the Adani group of decades of “brazen’ stock manipulation and accounting fraud”. Mr Adani and his company denied the allegations, calling them “malicious” and an “attack on India”.

In the days following the report, the Adani group saw about $108bn wiped off their market value but firm’s financial health has bounced back since.

Last year, Hindenburg Research accused Madhabi Puri Buch – the chief of market regulator Securities and Exchange Board of India (Sebi) – of having links with offshore funds used by the Adani group. Both Ms Buch and the Adanis denied any wrongdoing.

Allegations by the firm have sparked furious political rows in the country, with India’s main opposition Congress party accusing Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) of not taking action against the Adani group.

Mr Adani, who is one of Asia’s richest men, is perceived as being close to Mr Modi and has long faced allegations from opposition politicians that he has benefited from his political ties, which he denies.

In his statement, Mr Anderson expressed a desire to open-source Hindenburg’s research methodology in the future.

“Over the next six months or so I plan to work on a series of materials and videos to open-source every aspect of our model and how we conduct our investigations,” he wrote.

Short-sellers like Hindenburg bet against stocks of companies that they believe have been involved in fraud or other financial wrongdoings, based on their investigations. The process involves borrowing a stock, immediately selling it and then repurchasing it when its value goes down to pocket the difference.