Hindenburg Research shuts down after shaking corporate empires

Hindenburg Research, the US based research firm known for short selling strategies, has officially been disbanded. The firm’s founder Nate Anderson announced this on January 15. The firm recently targeted bigwigs like Gautam Adani in its reports and caused a lot of financial chaos during its time.

In a statement Anderson said, “We shook some empires that we felt needed shaking.”

Founded in 2017 Hindenburg built its reputation by exposing corporate fraud and malpractice. Its reports would often cause the targeted companies’ stock to plummet.

One of Hindenburg’s big reports was on January 24, 2023 when it accused Adani Group of fraud and stock price manipulation. The impact was immediate—on January 25, Adani Group stocks fell by up to 10% erasing ₹96,672 crore from 10 companies.

The report also brought SEBI under the scanner. Hindenburg accused SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch of conflict of interest, claiming they have ties to offshore entities linked to Adani’s activities. This was supported by whistleblower documents and further investigation.

Hindenburg didn’t just stop at industrial giants; it also looked at the entertainment industry. Its first investigation in 2017 was on Eros International, a US listed Indian film company. Hindenburg accused Eros of massive accounting irregularities including undisclosed related party transactions, inflated assets and fabricated revenue.

Eros filed a lawsuit against Hindenburg but the case was dismissed. Hindenburg published more reports in 2019 with further evidence of accounting issues.

By January 2023 Eros was delisted from the NYSE. In 2023 and 2024 SEBI’s investigations confirmed many of Hindenburg’s allegations, found related party transactions and financial record manipulation. This led to fines and ban on Eros’s promoter Sunil Lulla.

Hindenburg claimed Eros had a large balance of uncollected accounts receivables which raised concerns of fraudulent revenue transactions or ‘round-tripping’ – a way to artificially inflate numbers.

The reports highlighted Eros Television Private Limited and Ayngaran International Films Private Limited (AIFPL), entities outside of Eros’s corporate structure. Both of these companies were involved in suspicious transactions including large advances and payables.

For example AIFPL owed money to Eros related entities despite having minimal financial activity. Hindenburg said these transactions suggested deeper accounting irregularities in Eros.

CARE Ratings, India’s 2nd largest credit rating agency, downgraded one of Eros’s key Indian subsidiaries by 10 notches to “default” in June 2019 citing slow debt collections. This was around the time Hindenburg finished its investigation.

Hindenburg concluded with non-existent receivables and dubious related party transactions including a $153 million payment to a supposed production company operating out of a small Mumbai slum run by the brother-in-law of Eros’s Chairman and CEO.