A US corporate scourge deflates the empire of Indian tycoon Adani

A US corporate scourge deflates the empire of Indian tycoon Adani

WASHINGTON: Nathan Anderson sees himself as a scourge of corporate manipulation, but some investors and business leaders see short-sellers like him as engaging in tactics more akin to Wall Street gunslinging for profit. Anderson heads the New York-based short-seller Hindenburg Research, which profits as its attacks on Indian business tycoon Gautam Adani gain steam.

A week ago, Hindenburg released a 106-page report on the Adani Group, calling it “The Largest Con in Corporate History.” Since then, Adani’s seven listed companies have shed more than $60 billion in the stock market. Hindenburg’s report did not attack Adani’s business activities so much as accuse the conglomerate’s managers of stock price manipulation, accounting fraud, tax evasion and money laundering.

As a short seller, Hindenburg is betting on-and profiting from-the fall of Adani’s share price. The strategy entails borrowing shares, selling them on the open market, then buying them back when the price falls before transferring them back to the lender and pocketing the difference.

“Hindenburg is a reputable short-seller. It is legal short-selling while issuing accusatory claims on a company,” Wuyang Zhao, of the University of Texas’s McCombs School of Business, told AFP. “The statements that you make about a company can be positive and they can