According to the National Bank of Kazakhstan, Freedom Bank is one of the fastest-growing banks in the country. Over the period from January to June, the bank reported a $521 million increase in issued loans (+82%) compared to the same period last year. The bank also reported a 44% increase in deposits, which is higher than the entire market on average.
Freedom Bank is part of the eponymous ecosystem of financial services, which is one of the biggest such ecosystems in Kazakhstan. For example, it includes the biggest broker, insurance companies, online retailers, and a telecommunication operator, which has become part of the ecosystem just recently.
Although Freedom has left the Russian market, it continues to show good performance. In fiscal year 2023, Freedom Holding Corp. reported $795.7 million in revenue (+15%), $5.085 billion in assets (+57.4%) and $205.6 million in net profit.
The stock value of Freedom (FRHC) has grown sixfold since the first day of being publicly traded, while its market cap reached $5 billion.
Big Short Sellers Game
For various speculators, this growth was like a drop of blood for sharks in the ocean. In August, Hindenburg Research published an investigation into the activities of Freedom based on open-source information. Analytics from Hindenburg Research are infamous for their attacks on public companies. They issue “investigations” about target companies while placing short positions in their stocks. As a result, they make a profit at the moment when this stock is crashing.
In its investigation on Freedom, Hindenburg reported that the holding was allegedly involved in wrongdoing, citing open-source information. However, all claims by investigators from the fund turned out to be groundless.
The next day, Timur Turlov, the founder and CEO of Freedom, thoroughly broke down all those claims and explained why those claims were not worth the paper they were written on. Moreover, shortly before Hindenburg’s report, Freedom issued its annual statement confirmed by one of the most widely known international auditors.
The Birth Of A New Historical Height
No wonder investors didn’t buy Hindenburg Research’s claims. Even though the price of Freedom Holding Corp. shares declined a little bit on the day when the report went public, they rapidly rebounded. After several days, they hit new historical heights. According to expert estimates, the short sellers might have lost about $20 million.
Nevertheless, the U.S. Securities and Exchange Commission has decided to examine publications about the holding more closely, according to CNBC. By the way, this is a common practice when Western regulators react to such public accusations in the media. This is their duty.
In turn, Freedom said that it has no clue what kind of investigations the CNBC article was talking about. The company doesn’t know any information about inquiries from regulators.
The holding is very serious when it comes to any probes. In a recent interview with the Kursiv edition, Timur Turlov said, “I think that almost all global regulators came to us this summer because in the case of high-profile public accusations, regulators are obliged to investigate.” Over the past couple of months, the holding has been targeted with information attacks by its competitors.
As the holding’s CEO noted, the FRHC board and its members hired a reputed and independent forensic investigator. He specialized in various corporate investigations. Along with the company’s lawyers, the lawyer is responsible for preparing an independent opinion to verify claims in the report by Hindenburg Research.
Apparently, the company is ready to fight back against any attack and won’t let bullies succeed.
Armed And Ready
One of the strategic goals of Freedom is the development of its American business. Over the past few years, the holding acquired Prime Executions, a local brokerage company, Maxim Group, an investment bank, and LD Micro, a platform for micro-cap conferences. To be successful in the U.S. market, you have to have experienced partners. This is why the holding collaborates with Delloite from the Big Four and Morgan Lewis, a respectable American legal company.
With these prominent consultants and impressive performance, the company has every resource necessary to protect its interests in every sphere.