The US firm that accused Gautam Adani’s company of fraud is shutting down

A US-based short-seller that has published reports accusing leading financial institutions in India and abroad of financial wrongdoing and fraud is set to shut down.

Nate Anderson, the founder of Hindenburg Research, announced Wednesday that he is disbanding the company, nearly eight years after it was founded.

The firm hit the headlines in India in 2023 after publishing explosive reports about billionaire Gautam Adani’s conglomerate, causing political wrangling and heavy 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 has gained notoriety for exposing alleged financial wrongdoing at some high-profile businesses. The firm’s reports resulted in businesses both in India and abroad losing billions of dollars in market value.

“Nearly 100 individuals 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 needed to be shaken,” Mr Anderson wrote in statement where he announced his decision.

In 2020, the company accused electric truck maker Nikola Corp of misleading investors about its technology. In 2022, company founder Trevon Milton was found guilty of lying to investors and convicted of fraud.

In 2023, he published a report that accused 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 announcement, the Adani group saw about $108 billion disappear from market value but the firm’s financial health has since recovered.

Last year, Hindenburg Research accused Madhabi Puri Buch – the head of markets regulator Securities and Exchange Board of India (Sebi) – connections with offshore funds used by the Adani group. Both Ms Buch and the Adani family have denied wrongdoing.

The firm’s allegations have sparked a fierce political row in the country, with India’s main opposition Congress 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 considered close to Mr Modi and has long faced accusations from opposition politicians that he benefited from his political connections, which he denies.

In his statement, Mr. Anderson expressed his desire to open up the Hindenburg research methodology in the future.

“Over the next six 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,” he wrote.

Short sellers like Hindenburg bet against stocks of companies they believe have been involved in fraud or other financial wrongdoing based on their investigations. The process involves borrowing shares, selling them immediately, and then repurchasing them when their value drops to pocket the difference.