Short seller trains its sights on US-listed holding company

Bengaluru — Hindenburg Research, the short seller that has tussled with high-profile tycoons such as Carl Icahn and India’s Gautam Adani in 2023, said on Tuesday its latest target is a Kazakhstan-based holding company.

The report sent shares of Nasdaq-listed Freedom Holding down nearly 9% to $69.30 in premarket trading. Freedom did not immediately respond to a request for comment.

Freedom’s units are involved in retail securities brokerage, market making and investment banking services. It also owns a bank and two insurance companies operating in Kazakhstan, according to a filing with the US Securities and Exchange Commission.

Hindenburg said its research into the company has revealed “hallmark signs of fake revenue” and evidence it “brazenly skirts sanctions”. Freedom also displays signs of market manipulation in its investments and its own stock, Hindenburg said.

The short seller said Freedom had “openly admitted” to providing services to sanctioned individuals and pointed to a disclosure from the company earlier in August.

“During fiscal 2023, our subsidiaries Freedom Bank KZ and Freedom Global provided brokerage services to certain individuals and entities who are subject to sanctions imposed by Ofac (Office of Foreign Assets Control), the EU or the UK,” Freedom had said in the statement. “These transactions did not involve any nexus with the US, the EU or the UK, as applicable,” the company had said at the time.

Hindenburg has been at the forefront of short-seller attacks in 2023, which have rocked several high-profile companies. Its campaigns led to a rout in shares of Indian conglomerate Adani Group’s companies and investment firm Icahn Enterprises.

Reuters