Hindenburg Research, the short-seller firm responsible for the 2023 attack on Adani Group, has been caught red-handed in a coordinated effort with Anson Funds to create and distribute negative reports on targeted companies for financial gain. This revelation has brought to light serious accusations of securities fraud, market manipulation, and a web of political connections that raise grave concerns about the motives behind the campaign against Adani.
Hindenburg, led by Nathan Anderson, had long maintained that their work was independent and that no external party controlled their research. However, court documents submitted as part of a defamation lawsuit have exposed the true nature of their operations. Anson Funds, a hedge fund based in Canada, has admitted to actively collaborating with Hindenburg to create reports that were strategically designed to bring down stock prices and benefit from short-selling.
What makes this case even more troubling is the revelation of a potentially dangerous political connection that ties Anson Funds to the broader narrative of the Adani attack. The wife of Moez Kassam, the co-founder of Anson Funds, has been identified as a former colleague of Mahua Moitra, the Trinamool Congress (TMC) Member of Parliament who became infamous for her vocal and sustained attacks on the Adani Group. Moitra, who has been a key figure in the opposition’s efforts to destabilise the Adani Group, has frequently targeted the conglomerate in the media, questioning its financial practices and ties to the ruling Bharatiya Janata Party (BJP).
The political stakes of the Adani controversy have been high. Allegations of stock price manipulation and corporate fraud made by Hindenburg Research were eagerly adopted by opposition leaders, especially those in the TMC, to launch scathing attacks against Prime Minister Narendra Modi and his government. In fact, many have speculated that the timing of Hindenburg’s report and its widespread media coverage was no accident. With the 2024 Indian general elections looming, the Adani controversy became a flashpoint for political debate, providing ammunition for those looking to discredit the Modi government.
Given the deep ties between Anson Funds and Mahua Moitra’s political network, it raises serious questions about the possibility of a coordinated attack on Adani, not only to make substantial profits through stock manipulation but also to settle political scores. Was the Adani controversy a mere coincidence, or was it a calculated effort to weaken one of India’s most powerful business conglomerates to align with political objectives? These questions now loom large, as investigations into the nature of the collaboration between Hindenburg, Anson Funds, and political figures like Moitra continue to unfold.
The wider impact of this scandal cannot be overstated. If it is proven that Anson Funds and Hindenburg Research were involved in a deliberate effort to manipulate stock prices, it could have serious consequences for financial markets globally. Short-selling campaigns that rely on false or misleading reports to drive down stock values are a form of market manipulation that undermines investor confidence and the integrity of stock exchanges.
The involvement of hedge funds like Anson Funds, which is a registered Foreign Portfolio Investor (FPI) in India, could also have far-reaching implications for India’s capital markets. The Securities and Exchange Board of India (SEBI) is already scrutinising the activities of Anson Funds, with experts suggesting that any negative outcomes from the investigation could jeopardise its FPI status in India. The potential loss of this status would further tarnish the reputation of both Anson and Hindenburg and send shockwaves through global financial networks.
Earlier, the anti-corruption watchdog Lokpal had summoned Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and the complainants, including Trinamool Congress (TMC) Member of Parliament (MP) Mahua Moitra, for a verbal hearing scheduled next month. The hearing addresses corruption allegations under investigation, involving accusations of misconduct and conflicts of interest, as outlined in a report by Hindenburg Research, according to an official directive.
On November 8, the Lokpal requested an “explanation” from Buch regarding grievances filed by Moitra and two other individuals. Buch was given four weeks to submit a response. In her affidavit, submitted on December 7, 2024, Buch raised concerns and provided detailed answers to each allegation.
The Lokpal, in an order dated December 19, deemed it necessary to provide both parties an opportunity for oral hearings to clarify their positions. The registry was instructed to send notifications to both the respondent (Buch) and the complainants for the hearing scheduled on January 28. The order also allowed the complainants and Buch to be represented by advocates during the hearing.
Furthermore, the Lokpal emphasized the importance of maintaining confidentiality during the proceedings and instructed that copies of Buch’s affidavit and documents be sent to the complainants. The complainants were also asked to submit a properly paginated compilation of any relevant documented verdicts by January 18, 2025.
Previously, on September 20, the Lokpal had stated that the complaint filed by Moitra, which alleged misconduct and conflict of interest involving Buch, lacked sufficient grounds for an investigation. The complaint stemmed from a report by Hindenburg Research, an activist short-seller based in the United States, which accused Buch and her spouse of having interests in offshore funds allegedly involved in a money laundering scandal linked to the Adani Group.
The explosive court filings reveal that Anson Funds, a key player in this scandal, not only worked closely with Hindenburg but also dictated much of the content of the reports. In a stunning admission during legal proceedings, Anson’s representatives confirmed that they colluded with Hindenburg to craft negative reports about certain companies. The goal was clear: generate stock debacles and profit from the resulting declines in market value. One of the most alarming aspects of this collaboration was the explicit discussion of “sharing the cut” of the profits, showcasing the deeply fraudulent nature of the arrangement.
This admission from Anson Funds undermines Hindenburg’s repeated claims of independence. For months, Nathan Anderson and his team had insisted that their reports were based purely on independent research, with no outside influence dictating their conclusions. However, the court filings and email exchanges exposed between the two parties tell a different story. Anson’s role was far from passive, as it took the lead in deciding the content, tone, and direction of Hindenburg’s findings, effectively transforming Hindenburg into a mere distributor of Anson’s research.
The revelations are not just concerning from a corporate perspective but also from a legal standpoint. The court documents suggest that multiple U.S. securities laws may have been violated, including the Securities Act of 1933 and the Securities Exchange Act of 1934, which govern fraud and market manipulation. By failing to disclose their collaboration and manipulating stock prices for profit, both Hindenburg and Anson Funds may have breached federal laws designed to maintain fairness and transparency in financial markets.
Regulatory bodies, including the US Securities and Exchange Commission (SEC), are reportedly intensifying their investigations into the actions of both Anson Funds and Hindenburg. The SEC’s investigation into Anson Funds has already led to a $2.5 million settlement in 2024 related to their involvement with other activist short-sellers, including notorious figures like Andrew Left of Citron Research. The SEC’s probe, however, is far from over, with additional charges expected in 2025.
The timing of Hindenburg Research’s decision to shut down only adds to the intrigue surrounding the scandal. Nathan Anderson’s announcement on January 15, 2025, that he would disband the firm was unexpected and raised eyebrows across the financial world. Anderson cited the toll of the “intense” nature of the work but refrained from providing any specific reason for the closure, leading many to speculate that the mounting legal and regulatory pressure may have played a role in his decision.
This announcement coincided with the resignation of US Attorney Breon Peace, who had been involved in bringing charges against Adani Group executives. Peace’s departure, along with the broader scrutiny of Hindenburg’s activities, raises uncomfortable questions about the political motivations behind the attacks on Adani. The fact that Soros-linked figures like Peace had played a role in the investigations suggests that the Adani affair was not merely a business dispute but potentially a larger geopolitical maneuver.
Hindenburg’s allegations against the Adani Group were weaponized by opposition parties in India to target the Modi government. Billionaire George Soros’ public statement about raising the Adani issue in Indian Parliament further fueled speculations of a coordinated attack on India’s economic sovereignty. Soros’ connection to Breon Peace, the former US Attorney who pursued charges against Adani, adds another layer to the controversy.
Comments