Why the Hindenburg Report should lead to a more detailed investigation on the organisation

Dear Hindenburg: 

There are two essential elements of research: The first is independence, and the second is integrity. 

Both involve not shorting the stocks of a company you have "researched" and then being found out, because you did not declare a conflict of interest. Since then, there hasn't even been a whiff of an apology from you. Which makes your case truly unique in the world. Any other research firm that did not disclose conflict of interest would have found itself de-registered. 

Then, you come up with ANOTHER "Research" report, this time targeting India's regulator personally, just as the regulator was starting to regulate finfluencers and lending apps. 

I have spent yesterday (It was Sunday, after all) reading your report, the statement from Madhavi ji, and your 'second explosive report' at 9 pm. 

Here's the thing: 

You are not connecting the dots. You are imagining connections. I invested in a fund that also invested in a suspect company x years ago. Therefore, I must be not investigating the said company today. 

Here are my questions to you: 

A. What did the rest of the investment portfolio of the fund? What has been the history of SEBI investigations or regulation upon these companies under Ms. Buch's leadership? 

B. What is the quantum of the said "gain" that prevented Ms. Buch from acting on Adani? USD 870,000? You might want to compare that to Ms. Buch's family income to understand why that figure makes no sense. 

C. What is the evidence that the investigation from SEBI into Adani was inadequate (other than you opinion, which, as you know, is less that worthless, in that if you point at someone we will only trust them more)? 

D. And the best part is your 416-word disclaimer: 

    - We are not a registered investment advisor. 

- The report is the nothing but “opinion and investigative commentary” and that readers should do their own due diligence.

- Following publication of any report or letter, we intend to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter. - Meaning, you are not saying you will not long or short them again to make moneys. 

- Hindenburg Research makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information

And my favourite part of the disclaimer: 

All expressions of opinion are subject to change without notice

- huh, really? 

Also, Hindenburg, the market of unethical finfluencers is MUCH BIGGER. If one wanted to make unethical monies, delaying investigation and regulation of that segment is much easier. In fact, her actions to protect small investors, to release a report on the performance of FnO traders, have only earned her respect - which is more than one can say for you. 

I want to know how your reports get the kind of media attention that they do. Other good researchers I know release better quality stuff and they have to share those reports on Whatsapp. 

Your report deserves to remain unread because it is ridiculous. But more importantly, it is time to look at your registration. You have now demonstrated two deliberately malicious attempts to influence India's securities market. 

PS: I tried to check what kind of legal entity you are, and Surprise, that information is not present on your website. There is no address, no leadership, no team, no information at all. Just one email id on the Contact us Page. It's a 3-page website. 

PPS: I would post this widely but that would only give u more publicity, which, in all honesty, you do not deserve at all. 

The Daily Collection practice of the Sindhis

The Sindhis are largely the bankers of the subcontinent. They provide business loans. I've rarely seen a Sindhi delve into loans for marriages etc.
Obviously, they charge a hefty interest, and the Indian average of 3% per month is not unheard of.
However, for collection, the Sindhis have a very unique method.
They do not do monthly EMIs. They travel to the Asami's (debtor's) place of business every evening, just after the bulk of the day's earnings have come in, and before it is time to do the accounting for the evening, and they take the day's share.

This system has many benefits. Here are a few that I could see:
A. Businessmen make their earning everyday. So a small daily contribution pinches less than a bulk monthly instalment. This is the greatest advantage of this system. It aligns itself to the cash flow cycle of the debtor.

B. Frequent Contact. Usually, these visits also become a time for small talk, perhaps a chai some day, etc. This allows the creditor to remain in touch with the debtor and also, as the confidant, become privy to business fluctuations before they become apparent to the market. The creditworthiness of the debtor is also assessed everyday. The creditor can, when he goes there, see how well the shop is doing, how many visitors appear, how stress free the debtor appears etc.

C. Low loss. Because the EMI is divided into 30 small parts, in the event of non payment, at least some part of the EMI has been recovered.

Has anyone in the corporate sector used this?
I think that Sahara India had this, but for their daily savings scheme, not for their loan collections.
I am not aware of anyone else.

The businessmen NEVER sends an employee to do this daily collection. It is always the seth himself. That is a very improtant point. The Munim can do the paperwork, but the daily collection is always physically done by the seth or his family member.