Hindenburg Research Alleges SEBI Chief’s Ties to Adani Group Funds

Hindenburg Research has made fresh allegations against Madhabi Puri Buch, the head of India’s Securities and Exchange Board (SEBI). The U.S.-based short-seller claims that Buch previously held investments in offshore funds linked to the Adani Group, a conglomerate led by billionaire Gautam Adani.

These new claims add to the ongoing scrutiny surrounding the Adani Group, which Hindenburg previously accused of stock manipulation and misuse of tax havens.

Details of the Allegations:

Hindenburg’s report alleges that Buch and her husband were investors in a sub-fund of the Bermuda-based Global Opportunities Fund in 2015.

According to whistleblower documents cited by Hindenburg, this fund was used by associates of Vinod Adani, Gautam Adani’s brother, to invest in Adani Group companies.

The report also claims that in 2018, Buch sought to redeem her husband’s entire investment in the fund shortly before she was appointed SEBI’s head in 2022.

Buch’s Response to the Allegations:

Madhabi Puri Buch has strongly denied the allegations, labeling them as baseless. In a late-night press statement, she asserted that she and her husband’s finances are fully transparent and have been consistently disclosed to SEBI. Buch has promised to issue a detailed response to the claims shortly.

Adani Group’s Reaction:

The Adani Group has categorically rejected the allegations, describing them as a calculated attempt to damage their reputation.

A spokesperson for the conglomerate emphasized that its overseas holding structure is fully transparent and that it has no commercial relationship with the individuals mentioned in the Hindenburg report.

The allegations have sparked a political outcry in India, with opposition parties, particularly the Congress party, demanding a parliamentary probe into the matter.

The opposition argues that potential conflicts of interest could compromise the ongoing SEBI investigation into the Adani Group and calls for a thorough investigation to ensure transparency and accountability.

Background and Ongoing Investigation:

These new developments follow Hindenburg’s January 2023 report, which accused the Adani Group of stock manipulation and improper use of tax havens. That report led to a $150 billion sell-off in Adani Group stocks, although some losses have since been recovered.

The SEBI investigation into those earlier allegations is still underway. The regulator is also issuing a “show cause” notice to Hindenburg for alleged rule violations related to its short-selling practices.

This ongoing saga highlights the complex interplay between regulatory bodies, major corporate entities, and political forces in India, with significant implications for market regulation and governance.