Hindenburg Research announces winding up of operations; Adani shares rally

US-based short-seller Hindenburg Research, whose reports on the Adani group triggered a rout in the conglomerate’s shares, on Thursday announced winding up its operations. 

 

In a statement on Hindenburg’s website, its founder Nate Anderson said: “The plan has been to wind up after we finished the pipeline of ideas we were working on. And as of the last Ponzi cases we just completed and are sharing with regulators, that day is today.”  Anderson, however, did not specify a single reason for the decision.

 

The shares of group firms almost recouped all the losses by June 2024, regaining an mcap of around Rs 19 trillion following the results of the general elections. However, in November 2024, the United States Department of Justice and Securities and Exchange Commission (SEC) charged several executives of the group. As of Thursday, the group’s total mcap stood at Rs 12.91 trillion. The Adani group denied the allegations by US prosecutors, saying none of its issuers was accused of wrongdoing in the legal filings.

 

India’s market regulator, the Securities and Exchange Board of India (Sebi), issued a show-cause notice in June 2024 to the short-seller, US-based hedge fund manager Mark Kingdon, and four others, accusing them of colluding to use non-public information to build short positions against the Adani group.

 

Sources said Sebi would continue its probe on Hindenburg even after disbandment.

 

Hindenburg Research dismissed Sebi’s notice as “nonsense” and claimed it barely broke even, earning a total of $4.1 million in gross revenue through gains related to Adani shorts.

 

The conglomerate also had to abandon a Rs 20,000 crore fresh share sale by its flagship company, Adani Enterprises, despite garnering full subscription.

 

In a second report released in August 2024, Hindenburg Research alleged that Sebi Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had financial ties to offshore entities implicated in the Adani money siphoning scandal, sparking a political storm. Puri Buch and her husband refuted the allegations and issued clarifications.

 

Sources said Sebi had concluded its probe into the Adani-Hindenburg matter and issued show-cause notices wherever necessary. The regulator had earlier informed the Supreme Court that it had carried out 24 investigations into the matter.

 

Four companies within the Adani group had received show-cause notices from Sebi as of September this financial year. The notices primarily concerned the alleged wrongful categorisation of certain entities’ shareholding as public shareholding.

 

The Adani group has reportedly filed for a settlement in the matter, according to people familiar with the developments.

 

Following Anderson’s announcement, the Adani group Chief Financial Officer Jugeshinder Robbie Singh in a cryptic post on X said: “Kitne Ghazi Aaye, Kitne Ghazi Gaye”. The Congress said Hindenburg’s closure does not mean a clean chit and asserted that without a JPC, the "already-compromised" institutions of the Indian state will continue to act only to protect the powerful. The Bharatiya Janata Party (BJP), on the other hand, asked Congress leader Rahul Gandhi if he has now got the "contract" to run Hindenburg's "shop" which it said "works in sync" with the Congress to destabilise India.

 

Anderson’s announcement comes a day after a Republican lawmaker asked the US Department of Justice to preserve all records related to the ‘selective prosecution’ of Adani and his group companies.

 

In his parting note, the Hindenburg founder said he would work over the next six months on a series of materials and videos to open-source every aspect of their model and how they conducted their investigations.

 

“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,” said Anderson in the letter in which he calls Hindenburg a chapter in his life.

 

Hindenburg is also known for its other reports on electric truck maker Nikola, Block Inc, and Icahn Enterprises.

 

“We are not fearless—we just have faith in the truth and hope it leads us down the right path,” said Anderson.