Shares of financial services provider Freedom Holding (NASDAQ:FRHC) are tanking today after Hindenburg Research accused the company of evading sanctions and raised doubts if its revenues were real.
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Since listing in 2019, FRHC shares have jumped by over 450% and Hindenburg has noted that the company has used customer funds for risky market bets while signs of market manipulation in its investments as well as shares are also visible.
FRHC was initially based in Moscow and after Russia’s invasion of Ukraine, shifted to Kazakhstan while offloading its Russia business to an employee for $140 million. Hindenburg alleges that the company’s Chairman and CEO Timur Turlov still secretly controls the Russian business and Ukraine has suspended the company’s brokerage license while also freezing its assets.
In the beginning, FRHC had pegged its growth on the Russian and Ukrainian markets but Hindenburg notes that its recent growth coming in solely from Kazakhstan (with a population of 19 million) is hard to believe.
While FRHC is yet to respond to the bombshell allegations, yesterday, the company also disclosed the receipt of a non-compliance letter from NASDAQ after failing to file its quarterly report for the quarter ended June 2023.
FRHC now has a 60-day window to regain compliance and is aiming to make the quarterly filing ‘as soon as practicable.’
With today’s decline, FRHC shares are now down nearly 11.6% over the past three months. In the meantime, short interest in the stock is now hovering at about 3.1%.
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