Short-selling firm Hindenburg Research has suggested that something big is soon coming up in India. Taking to X (formerly Twitter), the firm wrote, “Something big soon, India.”
The US-based short seller criticised the Adani Group last year, releasing a report in January 2023 that accused them of financial misconduct.
Short-selling firm Hindenburg Research has suggested that something big is soon coming up in India. Taking to X (formerly Twitter), the firm wrote, “Something big soon, India.”
As netizens speculated about which company the firm was referring to, some criticised the firm for short selling. The US-based short seller had previously targeted the Adani Group, releasing a report in January 2023 that accused them of financial misconduct.
Meanwhile, some X users have urged against panicking over the recent post, with one pointing out that despite Hindenburg's shorting attempts, the Indian market has recovered strongly since January 2023, with the Sensex rallying by approximately 20,000 points.
The Adani-Hindenburg Saga
The Adani-Hindenburg Saga, as it is commonly called, started on January 24, 2023. The short-selling firm released a report titled ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’.
The report, according to the firm, unveiled the results of a two-year investigation, providing evidence that the Adani Group valued at Rs 17.8 trillion ($218 billion), had been involved in bold stock manipulation and accounting fraud for decades.
“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85 per cent downside purely on a fundamental basis owing to sky-high valuations,” adds the report.
Following the report, Jugeshinder Singh, Group CFO, Adani, gave a statement saying that the report is a harmful mix of selective misinformation and baseless allegations. Singh added that these allegations have been scrutinised and dismissed by India's highest courts.
In February 2023, the Supreme Court agreed to hear a request from a Congress leader asking for an investigation into the Adani Group after the Hindenburg issue.
However, in January 2024, the Supreme Court overturned its decision and said that market regulator Securities and Exchange Board of India (SEBI would look into the matter. Following this verdict, Gautam Adani, Adani Group Chairman, posted on X, “The Supreme Court’s judgment shows that truth has prevailed. I am grateful to those who stood by us. Our humble contribution to India’s growth story will continue.”
Meanwhile, in July this year, the court dismissed a petition seeking to review its January 3 decision, where it refused to transfer the Adani Group investigation to a special team or the CBI.
The Kotak Mahindra Case
Recently, Hindenburg Research said that a fund was created by Kotak Mahindra Bank to bet against Adani, an allegation that is denied by the bank. This statement was given by Hindenburg research after the SEBI issued a show cause notice against the firm.
On July 1, 2024, the research firm mentioned in its blog that the showcase notice by the market regulator was “an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India.”
“One might think that a securities regulator would be interested in meaningfully pursuing the parties that ran a secret offshore shell empire engaging in billions of dollars of undisclosed related party transactions through public companies while propping up its stocks through undisclosed share ownership via a network of sham investment entities,” the firm added.
Rather than targeting those engaging in questionable practices, SEBI appears to focus more on going after those who reveal these practices, added the firm.