The American company that accused Gautam Adani’s company of fraud closes its doors

A US-based short seller that had published reports accusing major financial entities in India and abroad of financial malfeasance and fraud is set to close its doors.

Nate Anderson, the founder of Hindenburg Research, announced Wednesday the dissolution of the company almost eight years after its founding.

The company had made headlines in India in 2023 after publishing explosive reports on billionaire Gautam Adani’s conglomerate, triggering political wrangling and significant losses for the company.

Mr. Anderson did not give a specific reason for his decision, but expressed a desire to spend more time with friends and family in the future.

Founded in 2017, Hindenburg Research became famous for exposing alleged financial irregularities at some large companies. The company’s reports have led to companies, both in India and abroad, losing billions of dollars in market value.

“Nearly 100 people have been charged civilly or criminally by regulators, at least in part as a result of our work, including billionaires and oligarchs. We have shaken some empires that we thought should be shaken,” Mr. Anderson in the 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 convicted of lying to investors and found guilty of fraud.

In 2023, he published 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, the Adani Group saw around $108 billion erased from their market value but the financial health of the company has since recovered.

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

The company’s allegations have sparked furious political rows in the country, with India’s main opposition 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 Asia’s richest men, is seen as close to Mr Modi and has long been the subject of allegations from opposition politicians that he would have benefited from his political connections, which he denies.

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

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

Short sellers like Hindenburg bet on the stocks of companies they believe have been involved in fraud or other financial wrongdoing, based on their investigations. The process involves borrowing a stock, selling it immediately, then buying it back when its value drops to pocket the difference.