Hours after Hindenburg Research Founder Nate Anderson said the firm is winding up, calls have been raised to take action against the organisation and Indian citizens who aligned with the New York-based short-seller.
Deven Choksey of DRChokesey Investment Advisors said the Hindenburg founder played on a loophole in Indian laws where regulation of offshore derivative securities of local companies is scant. He also said raised the possibility of a more powerful entity behind the short-seller.
"When you are a short-seller, you need to have backing from a financially strong muscle. Till the time that comes to conclusion, one could not talk fully about Anderson and Hindenburg," he told NDTV Profit.
Bhumika Batra, partner at law firm Crawford Bayley and Co., said though Hindenburg is closing, Anderson will not go away. "No recent report has garnered attention. The timing, disclosure and wording of the letter does not match up to the status that he has," she said.
Market expert Ajay Bagga speculated that "an agreement to quietly shut down" was an out for Hindenburg as it might have regulatory action, like penalties, coming its way.
"Hope they get prosecuted and are not let off so easily, in case some regulatory or legal action is ongoing against them," he said in a post on social media platform X.
Bagga said the firm operated in a grey zone, publishing negative reports and taking short positions, including via hedge funds who were not disclosing their positions.
Noting that short-sellers hardly ever make sustained profits, he said damage has been done to companies, promoters and markets by targeted attacks from which they sought to benefit.
Hindenburg closure: Possible reasons:
1. It operated in a grey zone, publishing negative reports and taking short positions, including via hedge funds who were not disclosing their positions
2. Short sellers hardly ever make sustained profits. That is why the few who do , as for…Supreme Court lawyer Jai Anant Dehadrai said Nate Anderson is now "fully exposed and in retreat". He questioned Indian citizens who allegedly tried spinning a conspiracy-theory against Prime Minister Narendra Modi, the Adani Group and the Securities and Exchange Board of India. However, he did not name any specific individual.
The Bharatiya Janata Party said that Hindenburg Research was part of a scheme to target India's economic interests.
"Whatever Hindenburg was doing to create economic upheaval and anarchy in India was a sponsored hit job. The Supreme Court took none of their reports seriously. It was funded by elements who are anti-India," BJP spokesperson Shehzad Poonawalla said in a video statement on Thursday.
He slammed the opposition Congress party for "lapping up Hindenburg reports as gospel truth" and sought explanation for raising the alleged lies in such reports, even after the courts dismissed them. "They must apologise," he said.
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