Mumbai: US short-seller Hindenburg Research alleged that it suspects SEBI’s unwillingness to act against Adani group may be because of its head Madhabi Puri Buch had stakes in offshore funds linked to the conglomerate – an allegation slammed by the SEBI head as “baseless” while Adani group said it never had any commercial relations with Buch.
Hindenburg alleged that Buch and her husband had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani – the elder brother of group chairman Gautam Adani – to round-trip funds and inflate stock prices.
SEBI in October 2020 began a probe into the shareholding structure of Adani group companies after red flags were raised over high concentration of foreign holdings in the conglomerate’s listed companies. An investigation was launched to determine if the foreign investors are genuine public shareholders or acting as fronts for the promoters.
Hindenburg Research released a report on Saturday alleging that SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, held stakes in offshore entities linked to the so-called “Adani money siphoning scandal.” This comes after the U.S.-based short-seller hinted at a new India-centric report.
The report, citing whistleblower documents, claims that the Buchs were involved in these offshore entities, which allegedly explains SEBI’s reluctance to conduct a thorough investigation into the Adani Group. Hindenburg asserted that SEBI’s inaction might be due to Chairperson Buch’s alleged complicity in using the same funds as Vinod Adani, Gautam Adani’s brother.
On Sunday, the Adani Group vehemently denied the allegations, calling them “malicious, mischievous, and manipulative.” In an official statement, the conglomerate accused Hindenburg of selectively using publicly available information to arrive at predetermined conclusions, driven by personal gain, without regard for facts or the law.
The Adani Group categorically rejected the claims, describing them as recycled accusations that have been thoroughly investigated, proven baseless, and dismissed by the Supreme Court of India in January 2024. The group emphasized that its overseas holding structure is fully transparent, with all relevant details regularly disclosed in public documents. They also clarified that Anil Ahuja, mentioned in the allegations, was a nominee director in Adani Power from 2007 to 2008 and later served as a director of Adani Enterprises until 2017.
“The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated, deliberate effort to malign our standing,” the company stated, reaffirming its commitment to transparency and compliance with all legal and regulatory requirements.
Madhabi Puri Buch and her husband also dismissed the allegations as “baseless,” asserting that their finances are fully transparent. They expressed disappointment that Hindenburg, against whom SEBI has taken enforcement action and issued a show-cause notice, chose to engage in what they termed a “character assassination.”
In a joint statement, the Buchs stated, “We strongly deny the baseless allegations and insinuations made in the report. Our lives and finances are an open book, and all required disclosures have been furnished to SEBI over the years.” They also expressed readiness to disclose any and all financial documents, including those from their time as private citizens, to any authority that requests them.
In January 2023, Hindenburg had released a report alleging financial irregularities, including stock manipulation and fraud, within the Adani Group, which led to a significant drop in the company’s stock price. While most stocks eventually recovered, the conglomerate has consistently denied the accusations and filed a defamation notice against Hindenburg.
The Supreme Court, in a ruling last year, noted that SEBI had “drawn a blank” in its investigation into the Adani Group. Hindenburg’s latest report claims that whistleblower documents reveal the Buchs’ involvement in offshore funds linked to the Adani scandal.
“We previously noted Adani’s confidence in operating without serious regulatory intervention, which may be explained by Adani’s relationship with SEBI Chairperson, Madhabi Buch,” Hindenburg stated. “What we hadn’t realized is that the current SEBI Chairperson and her husband had hidden stakes in the same offshore funds used by Vinod Adani.”
Hindenburg also claimed that SEBI faced challenges in responding to Supreme Court requests for an investigation into the Adani issue, suggesting that the SEBI Chairperson may have avoided following a trail that led to herself.
The Congress party reacted strongly to the report, accusing Prime Minister Modi of “hatching a conspiracy to save his ‘best friend.'” In a post on the party’s X (formerly Twitter) handle, they suggested that the SEBI Chairperson’s involvement in the Adani mega scam pointed to a broader cover-up orchestrated by the Modi government. The party reiterated its demand for a Joint Parliamentary Committee (JPC) to investigate the matter thoroughly.
