Nathan Anderson, the founder of Hindenburg Research, recently broke his silence on why the US-based short-selling firm decided to launch an investigation into the Adani Group.
In an interview, Anderson stated that the decision was triggered by “red flags” raised by some media outlets. He emphasised that the decision to shut down Hindenburg was due to workload and not due to any legal or personal threats.
Anderson stood by all of the firm’s reports, including the controversial one on the Adani Group.
The Hindenburg Research report, released in January 2023, accused the Adani Group of using offshore companies to inflate revenue and manipulate stock prices while accumulating excessive debt.
The report, which led to a dramatic fall in the stock prices of Adani Group companies, wiped out more than USD 150 billion from their market value. Despite this, the group managed to recover a significant portion of its losses over time.
The Adani Group has consistently denied all allegations and has described the report as a deliberate attempt to harm its reputation. The matter eventually reached the Supreme Court, which concluded that no further investigation was needed beyond the ongoing probe by India’s market regulator, SEBI.
Anderson addressed claims that the Hindenburg report was an attack on India’s economic growth.
He rejected such allegations, stating that Hindenburg Research has always believed in India’s potential and views market transparency and strong corporate governance as key elements that will drive the country’s growth.
He also dismissed attempts to link Hindenburg to anti-India groups like OCCRP and George Soros, calling such claims “goofy conspiracy theories.” He stressed that Hindenburg never entertained these ideas and stuck to its policy of not indulging in such baseless claims.
When asked why he decided to shut down Hindenburg Research in January, Anderson clarified that it was not due to any external pressure but due to the overwhelming workload. He explained that since the brand was so closely associated with him, it was difficult to hand it over to someone else.
Anderson made it clear that Hindenburg Research was synonymous with his name and could not simply be passed on to another person, unlike a software application or a factory.
Despite shutting down Hindenburg, Anderson remained firm in his belief that the firm’s research, particularly the Adani Group report, was entirely accurate. He expressed confidence in the validity of the findings, saying, “We 100 per cent stand by all of our research findings.”
However, he hinted that his former team might continue working under a different brand in the future. He also mentioned that he would be happy to support his team if they decided to launch a new brand.
Anderson was also questioned about allegations that Hindenburg Research had collaborated with groups like OCCRP or hedge funds. He firmly rejected these claims, stating, “We have always maintained full editorial control over all of our research.”
He further explained that Hindenburg’s business model, like many other US-based short sellers, involved investing their own capital and, on occasion, bringing on a balance sheet partner.
Anderson clarified that this business model was fully compliant with applicable laws, and they always disclosed it in their reports.
He further elaborated on the role of regulatory bodies in India in response to Hindenburg’s reports. Anderson explained that Hindenburg’s role was to research and highlight issues requiring greater transparency. He clarified that the rest of the process was beyond their control.
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