Who is Hindenburg, the shortseller that sent India’s giant Adani business empire into a tailspin?

Hindenburg is back in the headlines after last weekaccusing Indian conglomerate Adani Groupof “a brazen stock manipulation and accounting fraud scheme.” It cited two years of research, including talks with former Adani senior executives and reviews of thousands of documents.

The Adani Group hasblasted the accusationscalling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”

Nevertheless, Hindenburg’s scorching allegations have caused the fortune of Adani Group’s founder, Gautam Adani, to slide by nearly $47 billion in just over a week, according to the Bloomberg Billionaires index. Here’s a look at the firm behind all the movement:

What is it?

Hindenburg says it specializes in “forensic financial research.” In layman’s terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.

Hindenburg has even come to be known as Ponzi hunters in some circles, according to the Washington Post, which detailed how it helped bring down an alleged $500 million scheme that targeted Mormons.

Where did the name come from?

The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”

Who else had Hindenberg gone after?

It’s perhaps most famous for a 2020 report on Nikola, a company in the electric-vehicle industry whose founder Hindenburg said made misleading claims to ink partnerships with top auto companies hungry to catch up to Tesla.

Among its allegations, Hindenburg accused Nikola of staging a video to calm skepticism about its truck, one that showed the vehicle cruising on a road. Hindenburg said the video was actually just showing the truck rolling down a hill after getting towed to the top.

What has come of such accusations?

For Nikola, quick scrutiny from the government and investors.

The company and its founder, Trevor Milton, received grand jury subpoenas from the U.S Attorney’s office for the Southern District of New York and the N.Y. County District Attorney’s Office shortly after Hindenburg released its report.

The Securities and Exchange Commission also soon issued subpoenas to Nikola’s directors.

Milton wasconvicted this past Octoberof charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.

And Nikola in late 2021agreed to pay $125 millionto settle SEC charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.

What does Hindenburg get out of this?

It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the U.S. and other investments that trade outside India.

It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment’s price falls. Afterward, if the price of a company’s stock or bonds falls because of the negative attention from the report, Hindenburg can profit.

Such short sellers have been criticized for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them ahealthy part of a stock marketkeeping stock prices in check and preventing them from running too high.