In a report published on August 10, US-based firm Hindenburg Research alleged that Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI) and her husband previously held investments in offshore funds also used by the Adani Group. It says the Bermuda-based Global Opportunities Fund which The Financial Times said was used by entities connected to Adani Group to trade in the shares of group companies, had sub-funds.
Hindenburg Report Exposes Alleged Adani Group Frauds: SEBI’s Investigation Hits A Wall
A report by Hindenburg was released on January 24, 2023. The report alleges that the Indian multinational corporation Adani Group engaged in decades-long schemes of accounting fraud and stock manipulation. However, the SEBI had “drawn a blank” in further investigations despite evidence of Adani group members’ involvement in alleged money laundering cases.
According to Hindenburg’s most recent report, a business owned by Vinod Adani had invested money in Bermuda’s “Global Dynamic Opportunities Fund” (GDOF). A British offshore territory is renowned for its favorable tax climate. Then, this money was placed in the “IPE Plus Fund 1,” a fund established in Mauritius, another country regarded as a tax haven.
Documents received from a whistleblower reveal that Madhabi Buch’s husband had correspondence with Trident Trust, the fund administrator in Mauritius, on March 22, 2017. Immediately before her political nomination as a SEBI “whole-time member.”
Additionally, Hindenburg questioned Dhaval Buch. As to why a former consultant to Blackstone Inc., has sponsored two of the four listed REITs in India. While the SEBI chairperson was pushing real estate investment trusts (REITs) as a viable asset class.
SEBI Chief Denies Allegations
In a statement released by a SEBI representative, the pair said, “We would like to state that we strongly deny the baseless allegations and insinuations made in the report.”
“All disclosures as required have already been furnished to Sebi over the years. We have no hesitation in disclosing any financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them.” They said a more detailed statement would be issued in due course “in the interest of complete transparency”.
In an official statement, the regulator’s representative restated Buch’s stance. The representative also urged investors to wait to react to stories like the one published by Hindenburg before exercising caution.
Government sources stated that since she came from the private sector, she invested in global funds instead of civil services. The finance ministry might be open to making accommodations for her. The same publication was told by the former head of the regulators,
“What is important to know is her conduct as a whole-time member or the chairperson of SEBI when Adani-related complaints or investigations came to her desk. Did she recuse herself?’’
SEBI On Adani Group Investigation
According to SEBI, when the Supreme Court recently issued an order on the matter in January of this year. Two of the 24 investigations against the Adani group were still ongoing. After that, one investigation was finished, and the last one was almost finished. Over 100 summonses were issued and over 300 papers. Totaling over 12,000 pages were scrutinized throughout the investigation, according to the statement.
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