 "Hindenburg row: Oppn calls for JPC probe, suspension of Madhabi Puri Buch")
Constituents of the opposition INDIA bloc on Sunday demanded a joint parliamentary committee (JPC) probe into the allegations of the US-based short-seller Hindenburg Research against Sebi Chairperson Madhabi Puri Buch and her husband Dhaval Buch.
In its latest report on Saturday, Hindenburg Research claimed that Madhabi and Dhaval had investments in the same offshore entity that was allegedly used to inflate Adani Group's stock prices.
Congress general secretary (communications) Jairam Ramesh, in a statement on his party’s behalf, said that Sebi’s “strange reluctance to investigate the Adani mega scam has been long noted”, including by the Supreme Court’s Expert Committee. The committee, he said, had noted that Sebi in 2018 diluted, and in 2019 entirely deleted the reporting requirements relating to the ultimate beneficial (i.e. actual) ownership of foreign funds.
"This had tied its hands to the extent that 'the securities market regulator suspects wrongdoing, but also finds compliance with various stipulations in attendant regulations... It is this dichotomy that has led to Sebi drawing a blank worldwide'," Ramesh said quoting the Expert Committee.
Under public pressure, after the Adani horse had bolted, Sebi's board reintroduced stricter reporting rules on June 28, 2023. It told the Expert Committee on August 25, 2023, that it was investigating 13 suspicious transactions. Yet the investigations never bore fruit, the senior Congress leader added.
He said the Hindenburg Research's revelations show that Madhabi and her husband invested in the same Bermuda and Mauritius-based offshore funds in which "Vinod Adani and his close associates Chang Chung-Ling and Nasser Ali Shahban Ahli invested funds earned from the over-invoicing of power equipment".
"These funds are believed also to have been used to amass large stakes in Adani Group companies in violation of Sebi regulations. It is shocking that Buch would have a financial stake in these same funds," Ramesh said.
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“This raises fresh questions about Gautam Adani’s two 2022 meetings in quick succession with Buch shortly after she became Sebi chairperson. Recall that Sebi was supposedly investigating Adani transactions at the time,” Ramesh said, demanding that the government act immediately to eliminate all conflicts of interest in the Sebi’s investigation of Adani Group. “The fact is that the seeming complicity of the highest officials of the land can only be resolved by setting up a JPC to investigate the full scope of the Adani mega scam,” he said.
The opposition parties also accused the government of concluding the Budget session of Parliament a day in advance for fearing the backlash on the issue. The Budget session was scheduled to end on Monday but concluded on Friday.
“When Parliament does not run, who is the biggest beneficiary?” asked Trinamool Congress Rajya Sabha leader Derek O’Brien. The beneficiary is the government which is why Prime Minister Narendra Modi’s “shaky coalition” cut short the Parliament session yet again, he said, adding that the INDIA alliance parties would have held the government accountable on Monday.
Trinamool’s Lok Sabha member Mahua Moitra said Hindenburg Research’s report was proof of “crony capitalism at its finest”. In a post on X, she asked whether the Central Bureau of Investigation (CBI) and the Enforcement Directorate will lodge cases under the Prevention of Corruption Act and Prevention of Money Laundering Act.
“One simple point – chairperson who has invested in (and interacted personally with) very same funds that need investigating, is leading (the) organisation entrusted with (the) fiduciary responsibility of finding out other owners of the fund tells (the) Supreme Court and its six-member committee that it had ‘drawn a blank’ and was a ‘chicken and egg situation’ in its investigation into the ‘ownership’ of 13 entities. What greater conflict of interest and mockery of justice is there?” Moitra asked.
Priyanka Chaturvedi, Shiv Sena (UBT) Rajya Sabha Member of Parliament (MP), said the Hindenburg Research’s report showed the extent of support that the top BJP leadership had given to its favourite industrialist.
Even institutions like Sebi were diluted by appointing allegedly compromised people, she said. “The quid pro quo circle gets wider and the modus operandi more sinister,” she added.
Buch and her husband Dhaval have rejected the claims made in the report, terming them “baseless allegations and insinuations”. “The same are devoid of any truth. Our life and finances are an open book,” they said in a joint statement.