Top 10 allegations by Hindenburg on Madhabi and Dhaval Buch: SEBI chief’s response

Hindenburg Research alegations on SEBI Chief: After an explosive report and serious allegations levelled by short seller Hindenburg Research against Gautam Adani Led Adani group’s debt position in January’2023, shocking new claim have been made by Hindenburg Research , where short seller links SEBI chairperson Madhabi Puri Buch to the “Adani money siphoning scandal.”

While Adani Group and its Chairman, Gautam Adani, had aggressively refuted all of the charges, the SEBI Chief also has denied the allegations . In a statement SEBI India Chief Madhabi Puri Buch has said that “In the context of allegations made in the Hindenburg Report dated August 10,2024 against us, we would like to state that we strongly deny the baseless allegations and insinuations made in the report.

The 10 Big allegations made by by Hindenburg against SEBI chief in their report are-

1. It has been 18 Months Since Hindenburg’s Adani Report, SEBI Has Shown A Surprising Lack Of Interest In Adani’s Alleged Undisclosed Web Of Mauritius And Offshore Shell Entities. As per Hindenburg an Adani director established the “IPE Plus Fund,” a small offshore fund in Mauritius, through India Infoline (IIFL), a wealth management company connected to the Wirecard scandal. Vinod Adani, Gautam Adani’s brother, allegedly siphoned money from the Adani Group, using the structiure by over-invoicing them for power equipment and used it to invest in Indian markets.
2. Referring to Whistleblower Documents, Hindenburg says that the documents Show Madhabi Buch, The Current Chairperson Of SEBI, And Her Husband Had Stakes In Both Obscure Offshore Funds Used In The Adani Money Siphoning Scandal

3. In its investigations into who funded Adani’s offshore shareholders, the Supreme Court said that SEBI had “drawn a blank.”

If SEBI genuinely wished to identify the offshore fund holders, highlighted Hindenburg Perhaps The SEBI Chairperson Could Have Started By Looking In The Mirror- said Hindenburg report.

Hindenburg Research says that – Find It Unsurprising That SEBI Was Reluctant To Follow A Trail That May Have Led To Its Own Chairperson

4. Thus Far, Hindenburg says that SEBI Has Not Acted Against Any Other Indian-Origin Suspected Adani Shareholders Operated By India Infoline: EM Resurgent Fund and Emerging India Focus Funds

5. Hindenburg has raised allegations that from April 2017 till March 2022, While Madhabi Buch Was A Whole Time Member And Chairperson

At SEBI, She Had A 100% Interest In An Offshore Singaporean Consulting Firm, Called Agora Partners. It was only on March 16th, 2022, Two Weeks After Her Appointment As SEBI Chairperson, She Quietly Transferred The Shares To Her Husband, said Hindenburg Research

6. In 2019, Madhabi Buch’s husband was appointed as a senior advisor to Blackstone while she was a Whole-time member of SEBI.

As per Hindenburg According to his LinkedIn profile, he had never worked for a fund in the real estate or capital markets.

7. One of the biggest sponsors and investors in REITS, a new asset class in India, is Blackstone. Hindenburg says that During Dhaval Buch’s Time As Senior Advisor, while his wife was A SEBI Official, Blackstone sponsored Mindspace and Nexus Select Trust, India’s second and fourth REITs to receive SEBI approval for a public IPO,

8. As per Hindenburg’s allegations, significant changes to REIT regulations have been proposed, approved, and facilitated by SEBI while Dhaval Buch served as advisor to Blackstone. These Include 7 Consultation Papers, 3 Consolidated Updates, 2 New Regulatory Frameworks And Nomination Rights For Units, Specifically Benefiting Private Equity Firms Like Blackstone

9. Another allegation pertains to SEBI Chairperson Madhabi Buch’s referring real estate investment trusts (REITs) as her “favorite products for the future” and encouraging investors to see the asset class “positively” at industry conferences. However Hindenburg said that “while making Those Statements, She Omitted To Mention That Blackstone, Who Her Husband Advises, Stands To Gain Significantly From The Asset Class”

10. Another of allegations includes that Currently, Madhabi Buch owns 99% of the Indian consulting company Agora Advisory, of which her husband is a director. Hindenburg Research said that “In 2022, This Entity Reported $261,000 Revenue From Consulting, 4.4 Times Her Disclosed Salary At SEBI”

SEBI Chief’s Response 

(More to come)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions