Naming a hedge fund is easy. Anodyne references to the natural world (peaks, stones, rivers or points) will usually do. Failing that, invoke ancient Greece. Christening a shock-and-awe short-selling outfit requires more creativity. Hindenburg Research, named after the doomed hydrogen-filled German airship, was founded by Nathan Anderson in 2017 to hunt for impending corporate disasters, and then hold a torch to them. The firm releases research reports on its website and typically profits when its targets’ shares plummet in value.
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Hindenburg’s reports allege all manner and seriousness of mischief, from insider transactions to accounting alchemy. Its latest publication has catapulted its inventive moniker into the headlines worldwide. On January 24th it accused the Adani Group, a giant Indian conglomerate run by one of the world’s richest tycoons, of stock manipulation and fraud. The Adani Group says that the charges are baseless and released a lengthy rebuttal.
Mr Anderson’s operation sleuths at pace. In the past two years it has published 19 investigations. Compared with Adani, most are minnows. Firms going public through special-purpose acquisition companies (SPACs), a controversial corporate form made popular during the pandemic listing boom, have proved a rich hunting ground. Hindenburg gained notoriety in 2020, after it accused Nikola, a startup with plans to make battery-powered lorries which listed via a SPAC, of rolling a powerless vehicle down a hill in a misleading promotional video. Nikola’s founder was later found guilty of defrauding investors by a federal court in New York.
Hindenburg’s targets often see a swift share-price drop, regularly of more than 10%. The Adani Group’s listed firms have so far lost around half their combined value. Nikola’s is down…
2023-02-02 09:18:13 Hindenburg Research, attacker of the Adani empire
Original from www.economist.com
On Monday, Hindenburg Research announced a scathing report accusing India-based Adani Group of engaging in a wide-ranging network of shady business activities from alleged tax evasion to misdeeds involving environmental destruction. The research firm claims to have unearthed a “web of corporate entities and fraudulent transactions” used by the group to “mask the full extent of its operations and business dealings”.
Hindenburg Research, an investigative research organization, conducted an extensive investigation of the Adani Group that revealed a wide range of alleged misdeeds. The research firm alleged that Adani used its various subsidiaries to evade taxes in India, hide profits, and even carry out illegal activities such as money laundering. Furthermore, the firm accused Adani of using its profits to fund environmentally-destructive activities, including deforestation and pollution of entire ecosystems.
The allegations have caused an uproar in India, which is already home to a variety of environmental and social issues. The Indian government has launched its own investigation into the Adani Group in response to the allegations made by Hindenburg Research. India is also seeking to bring about changes to its taxation system in order to better track corporate practices and combat tax evasion.
Hindenburg Research has stated that its investigations are ongoing, and that the organization has yet to uncover the full extent of the Adani Group’s alleged misdeeds. As of now, the evidence compiled by the research firm paints a troubling picture of an international corporation’s business practices. While only time will tell how successful Hindenburg Research’s efforts will be in unmasking the group’s behavior, the research firm has managed to create a buzz that’s leading to much-needed changes in India.