Hindenburg’s shutdown | Paranjoy Guha explains its implications on Adani Group.

The end of Hindenburg Research’s operations has sparked a wave of discussions,especially considering the company’s deep dives into corporate conglomerates like theAdani Group.The timing is notable, with questions arising about whether this is linked to broaderpolitical events, including Donald Trump’s upcoming presidency. In an interview with TheFederal, Paranjoy Guha Thakurta, a senior journalist, provides insights into theHindenburg saga, its impact on global corporate practices, and the allegations againstAdani.Thakurta is also the only journalist against whom Adani’s lawyers have instituted sixcases of defamation currently pending in different courts of law—five in Gujarat and onein Rajasthan.A Long History of Corporate ExposuresHindenburg Research is known for its investigative reports that exposed unethicalpractices within large companies. “Hindenburg Research, despite being a small team,made significant revelations,” says Thakurta, emphasising that the company’s work ledto legal charges against over 100 individuals worldwide.“This wasn’t just about the Adani group; many global companies have facedHindenburg's scrutiny,” he adds. Companies like Nikola, Clover Health, and DraftKingswere also part of Hindenburg's spotlight, with their stock values plummeting afterallegations of fraudulent activities were made public.Thakurta stresses that Hindenburg’s success lies in its forensic auditing approach, amethod that looks deeply into corporate records to uncover hidden discrepancies. “Theywould investigate undisclosed transactions and illegal activities, something akin toinvestigative reporting,” he says.The Hindenburg Name and Its SymbolismThe name “Hindenburg” itself carries significant weight. Named after the infamousGerman airship disaster of 1937, it symbolises monumental failure. Thakurta explains,"Nathan Anderson, the founder, chose the name to epitomise man-made corporatedisasters." Hindenburg’s strategy has been to combine forensic investigation with shortselling, a method that involves betting against companies based on their financialmalpractices.“Their model is legal in the US, though not in India entirely, but it has proven effective,”Thakurta remarks, referring to how Hindenburg’s financial model of betting on stockdeclines was part of what made their reports so influential.Adani's Response and Alleged Political LinkagesThe Adani Group’s response to Hindenburg's 2023 report was swift and dramatic.According to Thakurta, “The Adani group called it an attack on India itself, conflating thecountry’s interests with their corporate fortunes.” He compares the reactions of othercompanies Hindenburg exposed, noting a similar pattern: initial denials followed byinvestigations. “This is not unique to Adani. It happened with Nikola, it happened withother companies. Eventually, investigations followed,” Thakurta adds.However, he questions why, despite the serious allegations, Gautam Adani has not suedHindenburg in a New York court, something he promised shortly after the report. “It’sbeen almost two years, yet no lawsuit has been filed,” Thakurta points out, highlighting adiscrepancy in the Adani Group’s actions.The Role of Investigative JournalismThe larger narrative, according to Thakurta, revolves around the role of investigativejournalism in holding powerful entities accountable. “Hindenburg and Nathan Andersonwere doing the job of investigative reporters but with the added financial leverage ofshort selling,” he says. However, this model has led some to question the politicalmotives behind Hindenburg’s findings, especially when the company announced it wouldshut down operations. Despite these concerns, Thakurta maintains, “They’ve operatedtransparently, and the investigations will continue, especially with the US Department ofJustice and the Securities and Exchange Commission still involved.”SEBI and Adani InvestigationsTurning to India, Thakurta points out that the Securities and Exchange Board of India(SEBI) has concluded its investigation into the Adani-Hindenburg issue. However, thereare still lingering questions about the regulatory body’s independence, particularly withregard to the conduct of its head, Madhabi Puri Buch. “She’s faced accusations ofconflicts of interest, yet has not taken sufficient action to address these concerns,”Thakurta comments. He believes that this undermines the credibility of the regulator ata time when transparency is needed the most.The Bigger Picture: Hindenburg's LegacyDespite the closure of Hindenburg Research, Thakurta believes the ramifications of theirfindings will continue to reverberate. “Hindenburg’s work has stirred a globalconversation about corporate accountability,” he concludes. “The Adani case is just thetip of the iceberg. There are much bigger stories to uncover.”As for the future of investigations and the political undertones surrounding them,Thakurta emphasises that the narrative will persist. “This story is far from over. WhetherAdani will face legal consequences remains to be seen, but the world is watching.”