After months and even years of attacks on Adani Group, it seems like the Hindenburg effect on the conglomerate is finally coming to a stop. The US-based short-selling firm that was behind reports that wiped out tens of billions from the market value of Adani Group, Hindenburg Research is finally shutting shutters. On January 15, Nate Anderson, who founded Hindenburg in 2017, through a note, announced his decision to disband the short-selling firm.
In the note, Nate Anderson said, “The plan has been to wind up after we finished the pipeline of ideas we were working on. And as of the last Ponzi cases we just completed and are sharing with regulators, that day is today.” He said that nearly 100 individuals have been charged civilly or criminally by regulators at least in part through Hindenburg’s work, including billionaires and oligarchs. “We shook some empires that we felt needed shaking,” he said. While he maintained that there was no particular threat or health issue or any big personal issue, he said, “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, however, with the announcement of shutting down operations as well, had an effect on the Adani Group of companies, but all positive. The Adani stocks surged between 3-5 per cent intra-day with the flagship company, Adani Enterprises seeing a gain of over 3 per cent in the early hours of Thursday’s trading session.
Now that we have come to a close of Hindenburg and in effect of the ‘Hindenburg saga’, here is a timeline of controversies clouding the Adani Group since 2023…
November 2024: US charged Gautam Adani, 7 others in $265 million bribery case
In November 2024, US prosecutors in New York indicted Adani Group Chairman Gautam Adani, his nephew Sagar Adani and six others for allegedly offering Rs 2,029 crore ($265 million) in bribes to Indian government officials for securing “lucrative solar energy supply contracts” with state electricity distribution companies. The US Attorney’s office in New York had released a press release that talked about a five-count criminal indictment that was unsealed in federal court in Brooklyn charging Gautam Adani, Sagar Adani and Vneet Jaain, with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements.
Also, Gautam Adani, Sagar Adani, and Cyril Cabanes, was charged by the Securities and Exchange Commission with conduct arising out of a massive bribery scheme. SEC had filed two complaints in the US District Court for the Eastern District of New York.
While the November indictment was not related to Hindenburg, it did lead to losses for Adani Group companies and its chairman. This was after a series of measures that the conglomerate took to stand back post the Hindenburg report lopped off over $135 billion in market value from Gautam Adani’s empire. Gautam Adani had hired top-shelf US crisis communication and legal teams, scrapped a $850 million coal plant purchase, reined in expenses, repaid some debt and promised to repay more. The conglomerate also raised over USD 5 billion (Rs 41,500 crore) in equity and a double of that in debt.
August 2024: SEBI Chief dragged in ‘Adani money siphoning scandal’
Hindenburg Research, on August 10, 2024, released a report accusing the chairperson of Securities and Exchange Board of India (SEBI) who was overseeing the Adani investigation, of having a stake in obscure offshore entities allegedly involved in ‘Adani money siphoning scandal’. The report was released almost 18 months after the first report by Hindenburg that raised concerns about stock price manipulation within the Adani group of companies. It alleged that SEBI did not act on claims Hindenburg made in its 2023 report against the Adani Group because SEBI Chief Madhabi Puri Buch had investments in offshore firms linked to the conglomerate.
The US-based short selling company cited documents from whistleblowers that claimed that the SEBI chief and her husband Dhaval Buch had made investments, dating back to 2015, in offshore funds in Bermuda and Mauritius linked to entities allegedly used by the Adani Group to manipulate financial markets.
SEBI, however, had issued a statement saying that it had duly investigated Hindenburg’s allegations against the Adani Group. It had also maintained that its chairperson had made the required disclosures in ‘terms of holdings of securities and their transfers’, had also recused herself in matters involving ‘potential conflicts of interest’. Later, the SEBI chief and her husband too had issued a joint statement denying these charges.
January 2023: Hindenburg accused Adani Group of fraud and ‘brazen’ stock price manipulation
This was where it all started. On January 24, 2023, Hindenburg Research had published a report titled “Adani Group: How The World’s 3rd Richest Man Is Pulling the Largest Con in Corporate History”, wherein it accused the conglomerate of fraud and ‘brazen’ stock price manipulation. Following this, Adani Group stocks had tanked up to 10 per cent on January 25 and ended the day with a market cap erosion of Rs 96,672 crore across 10 counters. The report had alleged that Adani Group of companies manipulated its share prices. It accused the Adani Group of pulling “the largest con in corporate history” by using a web of companies in tax havens to inflate its revenue and manipulate stock prices, even as debt piled up.
The conglomerate had, however, denied the allegations. In an address at Adani Enterprises’ AGM, Gautam Adani had said that report was a calculated strike designed to defame Adani Group with the intention of doing the maximum damage. “Typical short sellers target gains from financial markets. This was different. It was a two-sided attack — a vague criticism of our financial standing and, at the same time, an information distortion campaign, dragging us into a political battlefield,” Adani had said.
In February 2023, a public interest litigation (PIL) was filed in the Supreme Court, calling for the formation of a committee under a retired judge to investigate the allegations. On March 2, 2023, the Supreme Court set up a six-member expert committee. In May 2023, the court-appointed expert committee submitted its report. On May 17, 2023, the Supreme Court granted SEBI an extension until August 14, 2023, to report on its investigation into Adani’s stock price manipulation allegations. On November 24, 2023, the Supreme Court reserved its verdict on multiple petitions related to the Adani-Hindenburg dispute. On January 3, 2024, the Supreme Court declined to transfer the investigation to a special team and instructed SEBI to complete its probe into two pending cases within three months. Later in June 2024, Hindenburg reported receiving an email from SEBI on June 27, followed by a show cause notice regarding alleged violations related to bets on Adani stocks.