Politics over Hindenburg SEBI chief allegations: Oppn demand JPC probe, BJP slams 'Balak Buddhi' Rahul Gandhi

Allegations by US-based short seller Hindenburg Research against SEBI chief Madhabi Buch has sparked a massive political showdown. The Congress and other INDIA Bloc parties have called for her removal and demanded a joint parliamentary committee (JPC) investigation. In response, the ruling BJP accused the opposition of conspiring to destabilize India's financial markets and create chaos.

The opposition also appealed to the Supreme Court for intervention after Hindenburg Research claimed that Madhabi Buch and her husband, Dhaval, held stakes in obscure offshore funds implicated in the alleged Adani money siphoning scandal.

Madhabi Buch and Dhaval have denied these accusations, calling them baseless. They argue that Hindenburg Research is undermining SEBI's credibility and engaging in character assassination rather than addressing a show cause notice issued for "violations in India."

The Adani group has stated that it has no commercial ties with the Buchs.

Following recent allegations, the Congress has demanded immediate action from the government to address conflicts of interest in SEBI's investigation into the Adani Group. They have reiterated their call for a JPC probe into the issue.

The opposition party has also urged the Supreme Court to take suo motu cognizance of the "entire scam" and oversee an investigation, given that SEBI, the investigating agency, is itself implicated in the matter.

The Congress argued that, given the severity of the allegations, SEBI Chairperson Madhabi Buch cannot continue in her role. Rahul Gandhi, Leader of Opposition in the Lok Sabha, claimed that SEBI's integrity has been "gravely compromised" by these allegations and questioned whether the Supreme Court would reexamine the situation suo motu in light of the new revelations.

"Honest investors across the country have pressing questions for the government: Why hasn't SEBI Chairperson Madhabi Puri Buch resigned yet? If investors lose their hard-earned money, who will be held accountable -- PM Modi, the SEBI Chairperson, or Gautam Adani?" the former Congress chief said.

"It is now abundantly clear why Prime Minister (Narendra) Modi is so afraid of a JPC probe and what it might reveal," he said.

Meanwhile, the TMC has called for the immediate suspension of SEBI Chairperson Madhabi Buch. "This situation is extraordinary. BJP is clearly on the backfoot in Parliament. We need both - a JPC as well as an SC monitored probe," TMC leader Derek O'Brien said.

"Chairperson of SEBI is an opaque investor in Adani Group. Samdhi Cyril Shroff is on Corporate Governance Committee. No wonder all complaints to SEBI fall on deaf ears," TMC MP Mahua Moitra alleged on X.

"One simple point - Chairperson who has invested in (& interacted personally with) very same funds that need investigating, is leading organization entrusted with fiduciary responsibility of finding out other owners of the fund tells Supreme Court & its 6 member committee that it had drawn a blank & was a chicken and egg situation in its investigation into the ownership of 13 entities," she added.

"What greater conflict of interest and mockery of justice is there?" she said in another post on X.

"We cannot trust SEBI under this Chairperson to do any inquiry into Adani. The Supreme Court will HAVE to revisit its decision post this information becoming public," she said.

The Aam Aadmi Party, demanding a JPC probe, labeled the situation a "BJP scam" and called for Prime Minister Narendra Modi to resign on moral grounds.

The RJD, Shiv Sena (UBT), and the Samajwadi Party (SP) also raised concerns about SEBI's role in the matter.

"The history of SEBI has been such that it has never been a true protector and support for investors. Only an impartial investigation can restore SEBI's reputation," SP chief Akhilesh Yadav said, adding a thorough investigation into the episode is imperative for India's economy.

The Left parties have also demanded for a JPC probe, with the CPI(M) stating, "Given these serious charges against the head of the regulatory authority, it is necessary that the Chairperson step aside till a proper investigation is conducted."

CPI(M) general secretary Sitaram Yechury, in a post on X, said, "The latest Hindenburg revelations have accused the regulator, SEBI, and that its chairperson herself is part of the manipulation. She must immediately quit and a Joint Parliamentary Committee to be constituted for the investigation."

"Balak Buddhi Rahul Gandhi has gone rogue"

The BJP has accused the Congress and other opposition parties of conspiring to create financial instability and chaos in India. They dismissed Hindenburg's allegations against the SEBI chairperson as an attempt to undermine the credibility of the financial watchdog.

BJP leader Amit Malviya said in a post on X, "This post confirms that Balak Buddhi Rahul Gandhi has gone rogue. The Leader of Opposition is now openly inciting and seeding doubt about the genuineness of the Indian stock markets. This blatant attempt to undermine confidence in our economy reveals true intention of Rahul Gandhi, which is nothing but destruction of India."

"All this comes despite the previous so called ‘expose' of Adani by 'Hindenburg' turning out to be a damp squib. The Expert Committee appointed by the Supreme Court concluded there was no regulatory failure regarding the allegations of price manipulation. On Jan 3, 2024, the Supreme Court, led by CJI DY Chandrachud, observed that 'no willful or deliberate violations were done by SEBI'," he added.

The BJP leader further alleged that Anla Cheng and Mark Kingdon, who reportedly hired Hindenburg, had manipulated markets to benefit financially and advance Chinese strategic interests. Malviya suggested that this manipulation aligned with a purported MoU between the Congress party and the Chinese Communist Party (CPC), a claim allegedly supported by a sworn statement from Shannon Van Sant, a former SupChina employee, before the US Congress.

Malviya praised the growth of retail participation in India's stock market, noting that it has become the fourth largest globally, surpassing $5 trillion. He highlighted significant increases in Demat and SIP accounts, mutual fund industry growth, and investor folios, demonstrating a robust expansion of the Indian financial sector.

"The Indian stock market has become the 4th largest globally, surpassing the $5 trillion mark. The number of Demat accounts has skyrocketed to 15 crores from just 2.2 crore in 2014, and SIP accounts have increased to 8.99 crore. The Indian Mutual Fund industry has grown over six-fold, from ₹9.75 lakh crores in Jun 2014 to ₹64.96 lakh crores in Jul 2024. Investor folios have more than doubled, rising from 8.38 crore in Jun 2019 to 19.10 crore in Jun 2024, with an average of 17.88 lakh new folios added each month in the last five years. In the last four years, 579 companies have raised Rs 3.13 lakh crores through IPOs," he wrote.

In contrast, Malviya criticized Gandhi for allegedly promoting a narrative that discourages investment and perpetuates poverty. "The Congress party, spearheaded by Balak Buddhi continues on the path to keep our people poor and in despair. Since independence, Congress’s policies have entrapped Indians in a vicious cycle of poverty.  Now, when Indians are finally seizing opportunities to invest in their future and elevate their economic status, Third Time Fail Rahul Gandhi aims to thwart this progress. His message is clear: keep the populace impoverished, dependent, and divided, ensuring they remain a captive electorate. On this issue, Rahul Gandhi, instead of going to the Court, incites people to avoid investments, perpetuating poverty—the very essence of Congress's motto," Malviya further said.

Malviya posed several questions to Gandhi:

1. What is your connection with Anla Cheng-Mark Kingdon enterprise or for that matter the OCCRP & other George Soros backed entities?

2. What is your relationship with Hindenburg? Congress leaders start posting minutes after the Hindenburg reports come out. Are these reports made in collaboration with the Congress?

3. Why has your hatred for Prime Minister Modi morphed into disdain for India’s growth story?

Malviya concluded that Gandhi's actions reflect a broader intent to undermine India's economic progress, urging that the Indian people deserve a more constructive opposition.