US-based short-selling firm Hindenburg Research is all set and ready to drop another bomb on an Indian company. After the Adani fiasco that gripped the stock markets for the longest period of time and triggered a $150 billion rout in Adani stocks, the short-seller has hinted at another ‘big’ India reveal. In a post on X (formerly Twitter), Hindenburg Research teased about a major reveal and said, “Something big soon India”.
The latest teaser on a new development or a revelation-to-be comes over a year after Hindenburg Research published its report on Adani Group accusing the conglomerate of insider trading and stock market violations. Hindenburg had released a report which was 106-pages, with 32,000 words, and included 720 citations, collectively detailing evidence that Adani “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”. The Adani Group has consistently denied all accusations. Sebi had been probing the Adani group, on Hindenburg Research’s claims of improper use of tax havens and stock manipulation. However, the Supreme Court in January this year had said that the Adani Group did not need to face more investigations beyond the current scrutiny of the market regulator.
The most recent complication in this came from the recent allegations from Mahesh Jethmalani, a senior Indian lawyer and BJP leader, in July. He claimed that Hindenburg report on Adani was commissioned by an American businessman with Chinese connections. He specifically named Mark Kingdon of Kingdon Capital Management LLC as the alleged party behind the report.
While Adani Group has been, since the launch of the report, denying all accusations, addressing the Adani Enterprises’ AGM, Gautam Adani had said that Hindenburg Research’s 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.
“The attack was a calculated strike two days before the closing of our follow-on public offer. Amplified by a segment of vested media, it was designed to defame us, do maximum damage and erode our hard-earned market value,” he further added.
Now while the short-seller is all set with a new revelation, the Adani episode has not taken a backseat. In July, Hindenburg Research said that it has received a show cause notice from the Securities and Exchange Board of India (SEBI) on June 27, outlining suspected violations of Indian regulations. The short seller trashed the show cause notice called it ‘nonsense’. In a blog post released released soon after, it said, “Today we are sharing the entirety of this notice, frankly because we think it is nonsense, concocted to serve a pre-ordained purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India.”
It went on and came down heavily on the Indian government and called corporate governance in India a ‘myth’. “The message sent to investors in India is equally loud: You have no real protection from fraud. Corporate governance in India is a myth for businessmen that can buy influence,” it had said.