The narrative surrounding Freedom Holding resurfaced in August last year when it was featured in a report by the well-known US short-seller Hindenburg Research. The reaction was swift but not fatal for the stock: the shares did not decline, and they climbed back to their prior highs after the firm promptly responded. About six weeks later, independent verification by S&P Global Ratings supported the company’s arguments, confirming the ratings of Freedom Holding and its subsidiaries and removing the rating from CreditWatch.
The essence of the accusations
Freedom Holding has been in the sights of Hindenburg Research, a hedge fund focused on uncovering alleged fraud in publicly traded companies. In these cycles, the publication of a critical report frequently dents share prices, while the fund profits from short positions—borrowing shares to sell before buying them back at a lower price if the alleged issues prove true. The August 15 report accused Freedom Finance of close ties to Russia, irregular financial performance, and sanctions evasion stemming from lax client scrutiny.
Freedom responded quickly, dismissing the investigation as speculation. The company pointed to its annual report, filed on the SEC’s website a few weeks before the bear raid, which contained an independent auditor’s assessment (Deloitte) countering Hindenburg’s claims.
In summary, the holding’s chairman, Timur Turlov, reportedly divested Russian assets and severed ties with the Russian Federation, resulting in a conformity agreement approved by the Central Bank of the Russian Federation. The auditor conducted careful checks of transactions, client profiles, and verification procedures used across all Freedom units. The emphasis on Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures largely defined the auditor’s review, which concluded with a clean bill of health. The company’s balance sheet, revenue, and overall financial position were verified and deemed compliant.
Following the news, Freedom Holding’s stock (FRHC) fell about 8 percent but rebounded within the day, and the price movement carried into the following week, briefly touching higher levels. Trading volume surpassed $100 million daily, underscoring the market’s dynamic response to the situation.
independent verification
Why commission another audit when the annual report already appeared conclusive? The leadership explained that public perception often pits the company’s narrative against that of critics. The aim, they said, was transparency. Reputation stands as a core asset, and the governance team asserted that the review would demonstrate the company’s integrity. Some of Hindenburg’s claims were described as technically inaccurate, misinterpreted, or unfounded.
The four-month independent audit scrutinized documents, examined offices, studied data, and interviewed a broad spectrum of managers, employees, and contractors. Focus areas included Freedom’s main subsidiaries in Kazakhstan and Cyprus, as well as Freedom Securities Trading, Inc. (FST Belize).
What conclusions did the experts reach?
The independent assessment found that recent growth was driven by organic factors such as client expansion and higher trading volumes, complemented by acquisitions and gains from securities trading as disclosed in Freedom Holding’s SEC filings and audited financial statements. The conclusions aligned with public disclosures and did not indicate manipulative or illegal practices. The review also affirmed strong global and local AML controls and governance structures across the group’s operations.
There was no evidence of sanction evasion or collaboration with sanctioned individuals. In addition, the audit found no manipulation of Freedom’s own shares or bonds linked to the Kazakhstan Sustainable Development Fund. It confirmed that intercompany dealings between Cyprus-based Freedom Finance Europe Limited and FST Belize complied with anti-money laundering and sanctions policies.
Briefly, the report highlighted Freedom’s Nasdaq listing and described how the group expanded its footprint to 19 countries, serving more than 370,000 clients with a market capitalization near $5 billion. The headquarters remain in Kazakhstan, which hosts a broader ecosystem of financial services, including digital banking, brokerage operations, payment systems, and insurance.
In 2023, Freedom also advanced its ESG commitments, publishing a sustainability report and embracing environmental, social, and governance practices. The company allocated funds to social enterprises and environmental projects, tracked emissions and resource use, and pursued digital innovations to reduce waste. Looking ahead to 2023–2027, Freedom outlined plans to invest in green and social initiatives, including ESG-linked bonds and programs to support communities and governance improvements (sources: official SEC disclosures and Freedom’s public filings).