Hindenburg's Nate Anderson reveals why he shut down firm, says stands by Adani report

Activist short-seller Nathan Anderson, known for his high-profile campaigns against the likes of Adani Group, said he is closing his firm, Hindenburg Research, not because of any threat - legal or otherwise - and that he stands by all its reports. 

Anderson told PTI that Hindenburg's January 2023 report accusing Adani Group of "the largest con in corporate history" was a result of following "red flags" raised against the conglomerate in media reports. 

Adani group had repeatedly denied all allegations in the report. 

He termed as "goofy conspiracy" the attempts by some to link Hindenburg with alleged anti-India groups like OCCRP and George Soros, saying his outlet never commented on them as it followed the policy of not feeding into "silly conspiracy theories". 

Anderson, who came to be known for meticulously detailed reports against companies he alleged were committing fraud, last month announced shutting down his forensic research firm nearly eight years after he founded it. 

Why Hindenburg shut down? 

Asked why he chose to shut down Hindenburg when he could have stepped back and passed on the reins of the company to someone else, he said there is "no way to separate me from the brand." "Hindenburg is basically synonymous with me," he said. "If it was a software application or a bicycle factory you can sell the application or the factory. But when it's research driven by me, you can't really just hand that off, and so I would not actually be 'done'. But I am happy to support the team if they want to launch a new brand, which I expect they will."  

Anderson, who first shot to fame with a report against electric truck company Nikola and had gone after the companies of major financial figures, including Carl Icahn's Icahn Enterprises LP, had last month blamed the "intensity and focus" of the job for the decision to wind up. 

He had spent much of the last eight years either in fights or preparing for the next fight. Many times during this period, he was often trailed and attempts were made to infiltrate his system. 

Shut down not due to threats 

"As to why I retired - it is all in the letter (released on January 16 that announced shutting down of Hindenburg) - it is not based on any threat, health issue, personal issue or otherwise," he said. 

Conspiracies theories like being on the verge of an investigation by the US Department of Justice and/or US SEC to "concoct a counter-narrative about my retirement is a great example of why I am happy to instead be enjoying more time with family, friends and good music," he said. 

Hindenburg has said it is not under investigation by the US SEC over anonymous reports linking its founder to a hedge fund for preparing reports targeting companies. 

Why Hidenburg report attacked Gautam Adani’s conglomerate? 

Asked if he stood by Hindenburg reports particularly against the Adani group, Anderson said, "We 100 per cent stand by all of our research findings." Hindenburg had alleged that Adani Group had used a web of companies in tax havens to inflate its revenue and manipulate stock prices, even as debt piled up. The conglomerate vehemently denied all claims but the damning report at one point sheared over USD 150 billion off its value, losses it eventually recouped in over a year's time. 

The issue was agitated before the Supreme Court which did not find any need for a probe other than the one market regulator SEBI had initiated into certain issues prior to the Hindenburg report. 

On some seeing the Hindenburg report as against India and its growth story, Anderson said, "We have always believed in India's potential and view market transparency and strong corporate governance as key factors that can fuel India's growth story."  

"We initially saw media articles outlining red flags, took a closer look, and just kept following the evidence," he said on why Adani group was chosen. 

On allegations of being in cohorts with OCCRP and George Soros, he said, "Of course not, but we have a policy of not feeding into silly conspiracy theories. When the main response to 100+ pages of evidence (presented in the report against Adani Group) is a goofy conspiracy, we view it as a sign that we were right on the mark." Asked about the response of regulatory bodies in India to Hindenburg reports, he said, "We view our role as researching and writing about issues in need of transparency. The rest is out of our hands."  

He dismissed allegations of sharing reports with hedge funds, saying, "We have always maintained full editorial control over all of our research." "As we and many other US-based short sellers have discussed in public interviews for years, our model involves investing our own capital and sometimes also bringing on a balance sheet partner. This is one of the most common business models in our industry, it is fully compliant with all applicable laws, and we disclose this in our reports," he added. 

The 40-something son of a university professor and a nurse, Nathan (Nate) Anderson on January 15 issued a personal note that Hindenburg Research was being wound up after it "finished the pipeline of ideas we were working on." The Connecticut man, who worked for 10 months as an ambulance driver in Israel, studied international business, finance, and accounting, managed money for the rich, believed he could make money by exposing corporate corruption. 

Hindenburg, founded in 2017, placed bets against the companies it was researching. And it made money when stock prices of its targets tumbled on disclosure of fraud and other abuses that it unearthed through deep forensic financial research. 

It however made surprisingly little money -- just over USD 4 million -- from the report on billionaire Gautam Adani's sprawling business empire in January 2023. 

That figure, disclosed for the first time by Hindenburg on its website last year, along with details of a letter it said it had received from India's markets regulator, SEBI. 

Anderson appears to be wanting to move on, having achieved what he and his colleagues wanted. "We shook some empires that we felt needed shaking," he wrote in a personal memo last month. 

But, this did take a toll on him. "It has come at the cost of missing a lot of the rest of the world and the people I care about," he had written. "It wasn't always obvious to me, but I now view all of this as a love story." Hindenburg's research has led to fraud charges and indictments against dozens of individuals, but has also resulted in expensive legal battles. The firm had just 11 employees. 

Its last published report was on online car retailer Carvana earlier this year. 

(Except for the headline, this story has not been edited by DNA staff and is published from PTI)