US firm that accused Adani Group of fraud shuts down

A U.S.-based short-selling firm, which previously issued reports accusing top financial entities in India and other countries of financial impropriety and fraud, has announced its impending closure. Nate Anderson, the founder of Hindenburg Research, announced on Wednesday that he would be dissolving the company after nearly eight years of operation.

The firm made headlines in India in 2023 for releasing an explosive report about billionaire Gautam Adani’s group, sparking political disputes and causing significant losses for the company. Mr. Anderson did not disclose the specific reasons for his decision but stated that he wanted more time to spend with friends and family in the future.

Founded in 2017, Hindenburg Research rose to prominence for exposing alleged financial irregularities at several well-known companies. The company's reports led to billions of dollars in market value losses for businesses in India and elsewhere. “At least nearly 100 people have been the subject of civil or criminal proceedings by regulators because of our work, including billionaires and oligarchs. We shook up some empires that we thought needed shaking up,” Mr. Anderson wrote in his statement announcing his decision.

In 2020, the firm accused electric truck maker Nikola Corp of misleading investors regarding its technology. In 2022, the company's founder, Trevon Milton, was found to have lied to investors and was convicted of fraud. In 2023, the company released a report accusing the Adani Group of decades of “brazen” stock manipulation and accounting fraud. Mr. Adani and his company have denied the allegations, calling them “malicious” and “an attack on India.”

In the days following the report's release, the Adani Group's market capitalization evaporated by approximately $108 billion, but the company's financial situation has since rebounded. Last year, Hindenburg Research accused the head of the market regulator, the Securities and Exchange Board of India (Sebi), Madhabi Puri Buch, of having ties to offshore funds used by the Adani Group. Both Ms. Buch and Mr. Adani have denied any wrongdoing.

The firm's accusations sparked intense political disputes in the country, with India's main opposition party, the Congress Party, accusing Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) of failing to take action against the Adani Group. Mr. Adani, one of Asia's richest men, is considered close to Mr. Modi and has long faced accusations from opposition politicians that he has benefited from his political connections, which he denies.

Mr. Anderson stated in his announcement that he hopes to open-source Hindenburg's research methods in the future. “Over the next six months or so, I plan to produce a series of materials and videos to open-source various aspects of our model and how we conduct investigations,” he wrote.

Short-selling firms like Hindenburg bet against the stock of companies they believe are involved in fraud or other financial improprieties based on their investigations. This process involves borrowing shares, selling them immediately, and then buying them back when the stock value drops to profit from the difference.