 "Sebi chief's response raises new questions, admits key points: Hindenburg")
Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch’s response to our report includes several important admissions and raises numerous new critical questions, said Hindenburg Research in a post on X late Sunday night.
Citing a massive "conflict of interest" in the Sebi investigation into the Adani matter, Hindenburg Research said, “Sebi was tasked with investigating investment funds relating to the Adani matter, which would include funds Buch was personally invested in and funds by the same sponsor which were specifically highlighted in our original report.”
“The Indian entity, still 99 per cent owned by the Sebi Chairperson, has generated Rs 23.985 million (US $312,000) in revenue (i.e. consulting) during the financial years ‘22, ‘23, and ‘24, while she was serving as Chairperson, per its financial statements,” it added.
Showing copies of personal emails claimed to be of the Sebi chief, Hindenburg had alleged in a report on Saturday that “Buch used her personal email to do business using her husband’s name while serving as a Whole-Time Member of Sebi.”
It raised the question: “What other investments or business has the Sebi Chairperson engaged in through her husband's name while serving in an official capacity?”
On Buch’s statement, issued on Sunday to rebut the allegations made by Hindenburg, and the statement of “commitment to complete transparency,” the whistleblower asked if she would “publicly release the full list of consulting clients and details of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm, and any other entity she or her husband may have an interest in?”
Statements by Sebi and Buchs rebutting allegations
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Buch on Sunday rebutted allegations made by Hindenburg Research in the Adani Group matter.
On Saturday, Hindenburg Research raised concerns about the delay in the Adani investigation and questioned Sebi’s impartiality, claiming that Madhabi Puri Buch and her husband, Dhaval, had conflicts of interest due to their investments in a fund allegedly used to inflate Adani Group stock prices. In addition to highlighting issues with the use of a foreign fund structure, the US short-seller also accused the Indian securities regulator of favouring real estate investment trusts (Reits) because of Dhaval Buch’s ties to private equity giant Blackstone, a significant investor in the domestic real estate sector.
Sebi and the Buchs each issued separate statements, rejecting all the allegations as baseless and accusing Hindenburg Research of character assassination. The Buchs received backing from legal experts and market participants, including Amfi, the mutual fund industry body, which supported her credibility and questioned the motives of the US short-seller.
Madhabi Puri Buch faced criticism from certain political parties, which called for a joint parliamentary committee (JPC) to probe the allegations.
She clarified that Blackstone was on the ‘recusal list’ maintained by the market regulator, which implies she was not involved in decisions impacting Blackstone.
In a fresh statement, Buchs provided extra details on their wealth, consultancy firms, associations, and investments in the alleged funds cited by Hindenburg.
IPE-Plus Fund 1 didn’t invest in Adani stocks: 360-One
360-One WAM said that its IPE-Plus Fund 1, in which Madhabi Puri Buch and her husband Dhaval Buch had invested, did not make any direct or indirect bet on the shares of the Adani Group during its tenure.
The wealth and asset management firm was responding to the American short-seller Hindenburg Research’s latest report, which alleged that IPE-Plus Fund 1 was set up by an Adani director through the erstwhile IIFL Wealth Management to invest in the Indian markets to inflate Adani Group stock prices.
However, 360-One WAM maintained that IPE-Plus Fund 1, a Mauritius-registered fund, primarily focused on debt investments. “At its peak, the fund’s assets under management (AUM) reached approximately $48 million, with over 90 per cent of the fund consistently invested in bonds,” it said.
Opposition calls for JPC probe
Hindenburg Research's allegations triggered a political suggest with the Congress and other INDIA bloc parties demanding her removal and a JPC probe.
The opposition parties also urged the Supreme Court to step in after Hindenburg Research on Saturday alleged that the Sebi chairperson and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal.
Congress President Mallikarjun Kharge said small and medium investors belonging to the middle class, who have trust in Sebi and invest their money in the stock markets, needed to be protected.