Hindenburg's Allegations Against SEBI Chairperson
In a detailed report, Hindenburg Research claimed that Madhabi Puri Buch, the chairperson of India’s market regulator, previously held investments in offshore funds associated with the Adani Group. Buch has denied these allegations, calling them baseless and promising a detailed rebuttal soon.
Political Implications and Demands for Investigation
The allegations have ignited criticism from India’s political opposition, who are pressing for a parliamentary inquiry into the matter. Hindenburg based its claims on whistleblower documents, asserting that Buch and her husband had stakes in funds significantly backed by associates of Vinod Adani, brother of the Adani Group’s chairman.
Adani Group's Response
The Adani Group dismissed these accusations, asserting that their overseas holdings are fully transparent. They criticized Hindenburg as a desperate entity disregarding Indian laws, and maintained that there are no commercial ties with the entities named in the report.
Background of Previous Allegations
This isn’t the first time Hindenburg has targeted the Adani Group. In January 2023, they published a report accusing the conglomerate of using tax havens and manipulating stocks. This led to a significant $150 billion market loss despite Adani’s denials. These allegations prompted an investigation by SEBI, which remains ongoing.
SEBI's Involvement and Rebuttals
As part of their inquiry, SEBI issued notices to Adani firms for alleged violations of stock market regulations. They also notified Hindenburg of potential rule violations for setting up a short-bet with non-public information, which Hindenburg refuted.
Detailed Allegations on Offshore Investments
Hindenburg's latest findings attempt to link offshore funds trading in Adani shares to personal investments of Buch and her husband. They highlighted the Bermuda-based Global Opportunities Fund, used by Adani-linked entities, claiming Buch and her husband invested in its sub-funds.
Buch’s Prior Involvement
According to the report, Buch, before ascending to a high-ranking position at SEBI in 2017, was involved in managing these investments. She allegedly sought to redeem her husband’s entire stake in the fund shortly before becoming SEBI’s head.
Call for Transparency and Further Investigation
Hindenburg has called for further scrutiny of the findings, emphasizing the importance of transparency. Buch and her husband have expressed willingness to disclose all financial documents to relevant authorities, asserting that they have already complied with all disclosure requirements.
Broader Political Context
The Adani conglomerate is seen as benefiting from the Indian government's infrastructure push. The Congress party, a main opposition, has previously suggested close ties between Adani and the ruling BJP, claims both parties deny. Congress now urges the government to eliminate conflicts of interest in SEBI’s investigation and seeks a comprehensive probe into the Adani issue.
