In January 2023, short seller Hindenburg Research put out a report claiming that executives at one of India’s largest conglomerates were manipulatin

The undercover hedge funds financing activist short sellers

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2024-11-15 07:30:03

In January 2023, short seller Hindenburg Research put out a report claiming that executives at one of India’s largest conglomerates were manipulating the company’s stock price.

The Adani Group and its multibillionaire founder Gautam Adani strenuously deny the accusations, but the report instantly wiped off as much as $140bn from the conglomerate’s market value and sent ripples through the country’s establishment. It also catapulted the New York-based Hindenburg and its founder Nathan Anderson into Wall Street lore.

Few saw it coming. But one that did was a hedge fund in New York almost 13,000 kilometres away from the Indian conglomerate’s headquarters.

Kingdon Capital Management had received a draft of the short seller’s report in November 2022 as part of an agreement it had signed with Hindenburg a year earlier, India’s markets regulator revealed in June.

The hedge fund, which was founded by Mark Kingdon in the 1980s, had set up a special fund in Mauritius and had started building a short position on Adani two weeks before Hindenburg released its report.