Short seller Hindenburg targets Kazakhstan-based Freedom, shares fall

(Reuters) -Hindenburg Research, the short seller that has already tussled with high-profile tycoons such as Carl Icahn and India’s Gautam Adani this year, said on Tuesday its latest target was a Kazakhstan-based holding company.

The report sent shares of Nasdaq-listed Freedom Holding down nearly 4.5% to $72.24 in early hours of trading. Freedom did not immediately respond to a Reuters 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 U.S. Securities and Exchange Commission.

Hindenburg said its research into the company had revealed “hallmark signs of fake revenue” and evidence it “brazenly skirts sanctions”.

Freedom was also displaying signs of market manipulation in both its investments and its own stock, Hindenburg added.

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

“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 European Union or the United Kingdom,” Freedom had said in the statement.

“These transactions did not involve any nexus with the United States, the European Union or the United Kingdom, as applicable,” the company had said at the time.

Hindenburg has been at the forefront of short-seller attacks this year, 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.

(Reporting by Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri)