After the 2023 Adani shock, Hindenburg Research made hints about a potential ‘big’ India reveal. On 10th August, 2024, the US short seller posted on X, “Something big soon India.”
Just prior to Adani Enterprises’ scheduled share sale, Hindenburg Research released a study on January 24, 2024, that highly criticized the Adani Group. The news caused the market value of Adani Group’s equities to drop by $86 billion and caused a large sell-off of its bonds that were listed internationally.
The company was accused of stock manipulation and fraud in the Hindenburg investigation. The issue concerns claims that Adani had artificially raised the price of its shares, which were contained in a report by short-seller Hindenburg Research. The shares of several Adani group companies saw a significant decline following the publication of these accusations, apparently amounting to more than USD 100 billion.
Two days prior to Adani Enterprises’ USD 2.5 billion follow-up public offering, the US short seller’s report was released. Every charge made in the Hindenburg Research research has been refuted by the Adani group on several occasions.
A prominent lawyer in India and BJP politician Mahesh Jethmalani said in July 2024, that a US-based businessman with Chinese connections had ordered the Hindenburg Research research, which caused a sharp decline in the shares of the Adani group companies in January and February of 2023.
According to Jethmalani, Hindenburg Research was contracted by American businessman Mark Kingdon, who founded Kingdon Capital Management LLC, to write research on the Adani Group.
In July 2024, Jethmalani made allegations on social media platform “X” that “spy” Anla Cheng and her spouse Mark Kingdon had employed Hindenburg Research to draft a report on the Adani group enterprises. The senior attorney went on to claim that they created a trading account through Kotak Mahindra Investments Limited (KMIL) in order to short sell Adani shares and profit millions of rupees at the expense of Indian retail investors.
Subsequently, Mahesh Jethmalani urged the government to look into the connections between China and political voices that aimed to discredit the Adani company following the Hindenburg report. He pointed out that the American short seller Hindenburg’s research, which singled out the Indian company, had a Chinese influence. He went on to say that the Adani group hit job was a kind of Chinese retaliation for not winning infrastructure projects like the Haifa Port.
Following SEBI’s investigation on the allegations, the Supreme Court of India had cleared the Adani group on Hindenburg charges. A review petition to establish a Special Investigation Team (SIT) under court supervision to look into the Adani-Hindenburg controversy was recently dismissed by the Supreme Court.
In June 2024, Group Chairman Gautam Adani addressed Adani Enterprises’ Annual General Meeting (AGM) and stated that the company was “faced with baseless accusations made by a foreign short seller that questioned our decades of hard work.”
“In the face of an unprecedented attack on our integrity and reputation, we fought back and proved that no challenge could weaken the foundations on which your Group has been established” he stated to the audience.
About Hindenberg Research
Established in 2017, the Hindenburg Research LLC is a U.S. investment research firm focused on activist short-selling. The company produces reports for the public on its website that accuse corporations of corporate fraud and misconduct. Among the businesses they have covered in their reports are Adani Group, Nikola, Lordstown Motors, Clover Health, and Kandi.