A US-based short-seller that has published reports accusing leading financial entities in India and abroad of financial scams and fraud will be shut down.
Nate Anderson, the founder of Hindenburg Research, announced Wednesday that he is disbanding the company nearly eight years after he founded it.
The company hit the headlines in India in 2023 after the publication of explosive reports about the conglomerate of billionaire Gautam Adani, which caused political conflicts and huge losses for the company.
Mr. Anderson did not share a specific reason for his decision, but expressed his desire to spend more time with friends and family in the future.
Launched in 2017, Hindenburg Research made a name for itself by exposing alleged financial irregularities in some well-known companies. The company’s reports resulted in companies both in India and abroad losing billions of dollars in market value.
“Nearly 100 individuals have been civilly or criminally charged by regulators at least in part through our work, including billionaires and oligarchs. We’ve shaken some empires we thought needed shaking,” Mr. Anderson in statement 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 have rejected the allegations, calling them “malicious” and an “attack on India”.
In the days following the report, the Adani group about 108 billion dollars lost its market value but the company’s financial health has since recovered.
Last year, Hindenburg Research accused Madhabi Puri Buch – the head of market regulator Securities and Exchange Board of India (Sebi) – connections with offshore funds used by the Adani group. Both Mrs Buch and the Adanis have denied any wrongdoing.
The company’s accusations have sparked fierce political conflict in the country, with India’s main opposition Congress party accusing Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) of failing to take action against the Adani group.
Mr. Adani, who is one of the richest men in Asia, is considered close to Mr. Modi has long faced accusations from opposition politicians that he benefited from his political connections, which he denies.
In his statement, Mr. Anderson expressed a desire to open up Hindenburg’s research methodology with code in the future.
“Over the next six months, I plan to work on a series of materials and videos to open up every aspect of our model and how we conduct our investigations,” he wrote.
Short sellers like Hindenburg bet against stocks of companies they believe are involved in fraud or other financial wrongdoing, based on their investigations. The process involves borrowing shares, selling them immediately and then buying them back when their value declines to pocket the difference.
