US-based Hindenburg Research, known for its controversial short-selling practices, has announced its decision to shut down. The firm gained international attention in January 2023 for its scathing report against billionaire Gautam Adani, which accused his conglomerate of corporate fraud and led to a dramatic drop in the market value of Adani Group companies.

In response to the closure, Jairam Ramesh, Congress party communications general secretary, emphasized that the shutdown does not absolve Adani of any wrongdoing. He referred to the allegations in Hindenburg’s report as part of a larger scandal, accusing the Adani Group of misusing Indian foreign policy and exploiting national resources.

Legal experts have voiced strong criticism of Hindenburg’s decision to cease operations, with some suggesting that mounting legal pressures, including investigations by India’s Securities and Exchange Board (SEBI), could have influenced the shutdown. Senior Advocate Mahesh Jethmalani referred to it as a “run for cover,” while Advocate PR Ramesh called for thorough investigations into whether the firm’s actions were part of a broader conspiracy to destabilize Indian markets.

The Bharatiya Janata Party (BJP) slammed Hindenburg, accusing the firm of engaging in “economic anarchism” and targeting India’s growing economic influence. BJP spokesperson Shehzad Poonawalla claimed that the firm’s reports were orchestrated attacks designed to harm India’s economic interests.

Ajay Bagga, a former senior banker, noted that Hindenburg’s business model, involving publishing negative reports while taking short positions, was legally ambiguous. He suggested that while short-sellers are often celebrated during financial crises, Hindenburg’s operations might have been financially unsustainable in the long term. Bagga also speculated that regulatory scrutiny could have played a role in the firm’s closure.

Hindenburg’s reports, which often caused significant damage to the companies they targeted, were criticized for their predatory nature. Unlike traditional short-sellers who use fundamental analysis, Hindenburg’s approach was seen as more financially motivated and harmful to market stability.

Nate Anderson, founder of Hindenburg Research, posted a letter on the firm’s website explaining the decision to close, citing personal reasons and the toll the work had taken on his life. Anderson, who started the firm in 2017, stated that Hindenburg would now be a chapter in his life, not his defining focus. The timing of the announcement, just days before Donald Trump’s inauguration, sparked speculation about the firm’s alleged connections to financier George Soros and potential pressure from the incoming administration.

The Adani Group, which saw its market value plummet by over $150 billion following Hindenburg’s report, has denied the accusations. Despite the firm’s closure, the impact of Hindenburg’s allegations continues to reverberate through financial markets, raising concerns about the future of short-selling practices and their regulation.