Explained: Who are the Hindenburg guys and why are they after Sebi chief Madhabi Puri Buch
Hindenburg controversy was over, the whistleblower who makes money by short-selling shares and bonds of its target companies has added a fresh twist to the unending saga by claiming that Sebi chief Madhabi Puri Buch and her husband had a stake in offshore entities linked to the Adani family.
The allegations come one-and-a-half months after Sebi issued a show-cause notice to Hindenburg for violating Indian market regulations and profiting by taking short positions.
Who is Hindenburg and how does it make money?
Hindenburg Research is a small US-based investor-activist firm founded in 2017 by Nathan Anderson. With the help of a handful of researchers, Hindenburg uses financial forensic tools to find potential accounting irregularities and other corporate governance-related issues in mostly high-profile companies.
In the past, the whistleblower has targeted companies like Nikola, Clover Health, Block Inc, Kandi, and Lordstown Motors.
Hindenburg's business model is simple — it shares the report with its clients in advance as they benefit by taking short positions in the targeted companies well before the report is out in the public domain. As the company's shares fall after the report is published, both Hindenburg and its clients gain financially.
In Adani's case, Hindenburg admitted to making $4.1 million in gross revenue but said it would hardly break even considering the high costs of running a two-year global investigation.
Why is Hindenburg suddenly after Sebi?
Hindenburg has been on the back foot in the Adani
