top of page

What is Hindenburg Research, the firm accusing Adani of fraud?

Hindenburg's scorching allegations have caused the fortune of Adani Group's founder, Gautam Adani, to slide by more than $34 billion in just a week.


Billionaire Gautam Adani. Credit- Reuters Photo.
What is Hindenburg Research, firm accusing Adani of fraud?

Hindenburg Research, the financial research firm with an explosive name and a track record of sending the stock prices of its targets tumbling, is taking on one of the world's richest men.



Hindenburg is back in the headlines after last week accusing conglomerate Adani Group of “a brazen stock manipulation and accounting fraud scheme.” It cited two years of research, including talks with former Adani senior executives and reviews of thousands of documents.


The Adani Group has blasted the accusations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts.”



Nevertheless, Hindenburg's scorching allegations have caused the fortune of Adani Group's founder, Gautam Adani, to slide by more than $34 billion in just a week, according to the Bloomberg Billionaires index. Here's a look at the firm behind all the movement:


What is it?

Hindenburg says it specialises in “forensic financial research.” In layman's terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.

Where did its name come from?

The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”



Who else has Hindenburg gone after?

It's perhaps most famous for a 2020 report 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.


Among its allegations, Hindenburg accused Nikola of staging a video to calm skepticism about its truck, one that showed the vehicle cruising on a road. Hindenburg said the video was actually just showing the truck rolling down a hill after getting towed to the top.


What has come of such accusations?

For Nikola, quick scrutiny from the government and investors.


The company and its founder, Trevor Milton, received grand jury subpoenas from the U.S Attorney's office for the Southern District of New York and the N.Y. County District Attorney's Office shortly after Hindenburg released its report.


The Securities and Exchange Commission also soon issued subpoenas to Nikola's directors.



Milton was convicted this past October of charges he deceived investors with exaggerated claims about his company's progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.


And Nikola in late 2021 agreed to pay $125 million to settle SEC charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.


What does Hindenburg get out of this?

It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the US and other investments that trade outside India.



It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment's price falls. Afterwards, if the price of a company's stock or bonds falls because of the negative attention from the report, Hindenburg can profit.


Such short sellers have been criticised for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them a healthy part of a stock market, keeping stock prices in check and preventing them from running too high.


Read more at DeccanHerald


Read more topics:

16 views0 comments

Comments


Planner 5D- Interior design app

Planner 5D- Interior design app

Flipkart Online Shopping App

Flipkart Online Shopping App

World population to reach 8 billion this year, as the growth rate slows

July 12, 2022 at 6:57:56 AM

15 November 2022 is predicted to be the day that the global population reaches eight billion. The projection is revealed in the UN’s World Population Prospects 2022 report, which also shows that India is on course to surpass China as the world’s most populous country in 2023.

World population to reach 8 billion this year, as the growth rate slows

WHO: Nearly one billion people have a mental disorder

June 22, 2022 at 7:20:50 AM

Nearly one billion people worldwide suffer from some form of mental disorder, according to the latest UN data – a staggering figure that is even more worrying if you consider that it includes around one in seven teenagers.

WHO: Nearly one billion people have a mental disorder

What can the UN do? Check the top 5 questions answered

April 6, 2022 at 10:51:48 AM

The current war in Ukraine, following the Russian invasion, has sparked all sorts of questions about the United Nations, particularly the role of the Security Council, the General Assembly and the Secretary-General.

What can the UN do? Check the top 5 questions answered

Ukraine: UN’s Guterres joins call for Bucha war crimes probe

April 6, 2022 at 8:22:29 AM

UN chief António Guterres on Tuesday added his voice to the growing international calls for a war crimes investigation into the killing of civilians in the Ukrainian town of Bucha.

Ukraine: UN’s Guterres joins call for Bucha war crimes probe

Recent terrorist attacks in Israel undermine ‘prospects for peace’: Guterres

March 31, 2022 at 8:29:57 AM

Secretary-General António Guterres on Tuesday night condemned recent terrorist attacks in Israel that have claimed the lives of at least 11 Israeli citizens.

Recent terrorist attacks in Israel undermine ‘prospects for peace’: Guterres

China's BYD ceases to produce gasoline-powered vehicles

4/4/22, 7:00 AM

Chinese auto manufacturer BYD announced Sunday that it has already ceased the production of traditional gasoline-powered vehicles starting from March.

China's BYD ceases to produce gasoline-powered vehicles

Performance-oriented all-new ŠKODA SLAVIA 1.5 TSI Launched creates a segment of its own

3/27/22, 10:42 AM

All new ŠKODA SLAVIA 1.5 TSI starts at ₹ 16.19 lacs

Performance-oriented all-new ŠKODA SLAVIA 1.5 TSI Launched creates a segment of its own

CARS24 Raises $450 Million, Nearly Doubles Its Valuation To $1.84 Billion

9/25/21, 6:16 AM

CARS24, India’s leading e-commerce platform for pre-owned vehicles, announced today the closing of a $450M round of funding including a $340M Series F equity round alongside $110M debt from diversified financial institutions.

CARS24 Raises $450 Million, Nearly Doubles Its Valuation To $1.84 Billion

Tata Motors launches the ‘XPRES’ brand for fleet customers

7/18/21, 6:13 PM

Tata Motors, one of India’s leading automobile manufacturers, today announced the launch of a new brand ‘XPRES,’ exclusively for fleet customers.

Tata Motors launches the ‘XPRES’ brand for fleet customers

Audi India announces curated ownership plans for Audi e-tron and Audi e-tron Sportback customers

7/18/21, 5:56 PM

Special Service Plans, Extended Warranty and Buyback for a hassle-free ownership experience

Audi India announces curated ownership plans for Audi e-tron and Audi e-tron Sportback customers

TikTok hits 1 billion global active users

9/28/21, 8:56 AM

TikTok mission is to inspire creativity and bring joy.

TikTok hits 1 billion global active users

FACT CHECK: Crypto is increasingly being used for criminal activity and is a haven for illicit finance

6/23/21, 6:11 AM

Because cryptocurrency is still new, we are often asked about the biggest myths surrounding it. It’s common for a new market or product to confuse people until they get familiar with it. Think about Airbnb: the idea of staying in a stranger’s home seemed crazy until it didn’t.

FACT CHECK: Crypto is increasingly being used for criminal activity and is a haven for illicit finance

PUBG: NEW STATE surpasses 17 Million Google play store PRE-REGISTRATIONS following its recent ALPHA TEST

6/19/21, 4:40 AM

KRAFTON, Inc. to open pre-registration for the game on Apple’s App Store in Q3 2021

PUBG: NEW STATE surpasses 17 Million Google play store PRE-REGISTRATIONS following its recent ALPHA TEST
bottom of page