Explainer: Who is behind Hindenburg?

NEW DELHI: US short seller Hindenburg Research has rejected Adani Group's charge that its report was an attack on India, saying a "fraud" cannot be obfuscated by nationalism or a bloated response that ignored response to key allegations.

Commenting on the 413-page response Adani Group released late on Sunday evening in response to its report, Hindenburg said it believed India was a vibrant democracy and an emerging superpower with an exciting future and it was Adani Group which was holding it back through "systematic loot".



Hindenburg has a track-record of finding corporate wrongdoings and placing bets against the companies. Here is all you want to know about the Hindenburg.

WHAT IS HINDENBURG RESEARCH

Founded in 2017 by Nathan Anderson, Hindenburg Research is a financial research firm that investigates equity, credit, and derivatives for potential accounting irregularities, mismanagement, and undisclosed transactions. The company invests its own capital and bets against the target after publishing reports on its findings. The name "Hindenburg" was inspired by the 1937 airship disaster. After finding potential wrongdoings, Hindenburg usually publishes a report explaining the case and bets against the target company, hoping to make a profit.

WHO IS HINDENBURG'S FOUNDER?

Nathan Anderson, graduate from University of Connecticut with a degree in international business, began his career in finance at FactSet Research Systems. "I realized they were doing a lot of run-of-the-mill analysis, there was a lot of conformity," he told the Wall Street Journal (WSJ) in 2020. He also did a brief earlier stint as an ambulance driver in Israel. The short-seller says on his LinkedIn page that it gave him "experience thinking and acting under extreme pressure." Anderson has said in interviews that Harry Markopolos, an analyst who first flagged Bernie Madoff's fraud scheme, is his role model.

WHAT IS HINDENBURG'S MOST HIGH-PROFILE BET?

Hindenburg is best known for its bet against electric truck maker Nikola Corp in September 2020, which generated "a big win," he told the WSJ, declining to specify the amount.

The short-seller said Nikola deceived investors about its technological developments. Anderson challenged a video Nikola produced showing its electric truck cruising at high speed - in fact the vehicle was rolled down a hill.

A U.S. jury convicted Nikola's founder Trevor Milton, Nikola's founder last year of fraud over allegations he lied to investors. The company agreed in 2021 to pay $125 million to settle with the U.S. Securities and Exchange Commission over its representations to investors. Nikola debuted as a listed company in June 2020 and its valuation reached $34 billion some days after, surpassing Ford Motor. Now, it is worth $1.34 billion. Hindenburg says whistleblowers and former employees helped it with findings.

HOW MANY COMPANIES HAS HINDENBURG TARGETED

Hindenburg has flagged potential wrongdoing in at least 16 companies since 2017, according to its website. Last year, it took a short and then a long position in Twitter Inc. In May, Hindenburg said it was short because it believed that Elon Musk's $44-billion offer to take the company private could get repriced lower if the world's richest person walked away from the deal. In July, Anderson disclosed a "significant long position," betting against Musk. The deal for Twitter closed in October at the original price.

(With inputs from Reuters)

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