Why Hindenburg Research, firm behind Adani Group allegations, is disbanding

Noting the impact of their work, he said, “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.” We recall the organisation’s work and the reason behind its recent decision.

First, what is Hindenburg Research?

Founded in 2017, Hindenburg Research’s website says it specialises in forensic financial research.

The company believes that “the most impactful research results from uncovering hard-to-find information from atypical sources”, and that it especially looks for aspects such as accounting irregularities, bad actors in management roles and undisclosed related-party transactions in companies.

What did Hindenburg allege about the Adani Group?

Days ahead of a $2.5 billion share offering by Adani Enterprises, stocks of Adani Group companies fell sharply (though they later recovered) after Hindenburg Research published a report. It claimed the conglomerate had “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”.

Hindenburg, which has short positions in Adani companies through US-traded bonds and non-Indian-traded derivative instruments, said key listed companies in the group had “substantial debt” which put the entire group on a “precarious financial footing”, Reuters reported.

Under short selling, an investor expects the security price (say, of stock) will fall rather than appreciate over time. While fundamentally it too is based on the “buy low, sell high” approach, the sequence of transactions is reversed in short selling — to sell high first and buy low later. Also, in short selling, the trader usually does not own the securities she sells but merely borrows them.

Jugeshinder Singh, Chief Financial Officer of the Adani Group, had called the report a “malicious combination of selective misinformation and stale, baseless and discredited allegations”.

Notably, in December 2024, the Adani Group was indicted by US prosecutors in New York in an alleged Rs 2,029 crore bribery case. The group denied the allegations.

Why is Hindenburg Research shutting down?

Anderson did not point to a specific reason for the decision. He wrote, “The intensity and focus has come at the cost of missing a lot of the rest of the world and the people I care about. I now view Hindenburg as a chapter in my life, not a central thing that defines me.”

Hindenburg Research LLC was founded by Anderson, who studied international business management at the University of Connecticut and lived in Jerusalem before returning to the United States where he took a consulting job with a financial software company, according to a profile of the man published in the Financial Times in June 2021. The firm has 11 employees.

In his statement, Anderson wrote, “Over the next 6 months or so I plan to work on a series of materials and videos to open-source every aspect of our model and how we conduct our investigations.”

What are some of its other notable projects?

According to an Associated Press report, Hindenburg Research questioned the number of pre-orders that startup electric truck maker Lordstown Motors had reported for its Endurance model, leading to a shakeup in its management. It has now been struggling and sold a huge auto assembly plant in Ohio to Taiwan iPhone manufacturer Foxconn.

“One of its most famous reports was a 2020 expose on Nikola, a company in the electric-vehicle industry whose founder Hindenburg said made misleading claims to ink partnerships with top auto companies hungry to catch up to Tesla,” it added.

In late 2021, Nikola agreed to pay $125 million to settle the US Securities and Exchange Commission’s charges, saying it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.