New developments have emerged in the Adani-Hindenburg row that began in January 2023 with the release of the first report by the US-based short-selling investment firm Hindenburg Research that alleged the Adani group had used offshore funds to siphon public money.
Hindenburg has now alleged in a new research report that the current Securities Exchange Board of India (SEBI) chair Madhabi Buch and her husband Dhaval Buch had stakes in these offshore funds linked to the Adani group named in its first report.
The new report presents a conflict of interest between Madhabi Buch’s position as chair of the regulatory authority and her personal financial dealings. The report cites the Supreme Court, which observed that the SEBI had “drawn a blank” in its attempt to identify the holders of offshore funds at the centre of scrutiny in the initial Hindenburg report and alleges that this was because the current SEBI chair and her husband were beneficiaries – a majority of it during Madhabi Buch’s time at the SEBI as a full-time member.
The report also states that favourable changes were made to regulations related to real estate investment trusts (REITs) and favoured REIT entities in which Dhaval Buch held significant positions and backed others. Whistleblower documents containing personal emails, account statements, fund details etc., have been filed to support the findings.
A SEBI statement released following Hindenburg’s recent report draws investor attention to the disclaimer in the document. The SEBI says the research firm may have short positions in the securities included in the report. The statement states that proceedings are currently ongoing against the Adani group before the quasi-judicial authority and hence the SEBI shall refrain from commenting on the matter. It also adds that any changes to regulations related to REITs were done with due process, and all encouragement and promotion of REITs were done with a view to develop the securities market in India.
The statement also states that the regulatory body has adequate mechanisms to address any conflict of interest and the same have been followed by the chair, including her recusal wherever such conflict has occurred. The SEBI has reiterated that it is a robust regulatory body aligning with global best standards in its framework and protection of investors.
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