Hindenburg attacking SEBI's credibility, assassinating chief's character: Buchs' 15-point rebuttal
The allegations, detailed in a Hindenburg report, accused the SEBI chairperson and her husband of having undisclosed investments in offshore funds linked to the Adani Group. Hindenburg suggested that these investments might have influenced SEBI's reluctance to act against the conglomerate.
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FollowIn a strongly worded response issued on Sunday evening, SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, have condemned recent allegations made by US-based short seller Hindenburg Research, accusing the firm of attempting to undermine the credibility of India's securities market regulator and engaging in a character assassination of the SEBI chief.
The Buchs clarified that their investment in a fund promoted by IIFL Wealth Management was made as Singapore-based private citizens and occurred two years before Madhabi Puri Buch joined SEBI as a whole-time member in 2017. The statement further emphasized that Madhabi's consulting companies became "dormant" immediately upon her appointment at SEBI.
Addressing the allegations, the Buchs also noted that Dhaval Buch, who has served as a senior advisor at Blackstone since 2019, is not associated with the real estate sector of the private equity giant.
"The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member," the 15-point statement said.
"The decision to invest in this fund was because the Chief Investment Officer, Anil Ahuja, is Dhaval’s childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, JP Morgan and 3i Group plc, had many decades of strong investing career. The fact these were the drivers of the investment decision is borne out of the fact that when, in 2018, Mr. Ahuja left his position as CIO of the fund, we redeemed the investment in that fund," it further read.
"As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company," the Buchs added.
"Hindenburg has been served a show cause notice for a variety of violations in India. It is unfortunate that instead of replying to the Show Cause Notice, they have chosen to attack the credibility of the SEBI and attempt character assassination of the SEBI Chairperson," the statement said.
Hindenburg Research has accused Madhabi Puri Buch and her husband of having undisclosed investments in obscure offshore funds located in Bermuda and Mauritius. These same entities are allegedly linked to Vinod Adani, the elder brother of Adani Group chairman Gautam Adani, and are purportedly used to round-trip funds and inflate stock prices.
In October 2020, SEBI initiated a probe into the shareholding structure of Adani Group companies following concerns over the high concentration of foreign holdings in the conglomerate's listed entities. The investigation aimed to determine whether these foreign investors were genuine public shareholders or merely fronts for the promoters.
Last year, SEBI informed a Supreme Court-appointed panel that it was investigating 13 opaque offshore entities that held between 14-20 percent across five publicly traded stocks of the Adani Group. However, SEBI has not disclosed whether these investigations have been completed, a point that Hindenburg has used to criticize the market regulator.
Meanwhile, In a separate regulatory filing, the Adani Group dismissed the allegations made by Hindenburg Research as "malicious, mischievous, and manipulative selections of publicly available information," accusing the short seller of reaching predetermined conclusions for personal gain while showing a blatant disregard for facts and the law.
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"The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing," it said. "We remain steadfastly committed to transparency and compliance with all legal and regulatory requirements".
Rejecting the allegations, the Adani Group stated that they are merely a "recycling of discredited claims that have been thoroughly investigated, proven baseless, and already dismissed by the Supreme Court in March 2023."
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