U.S.-based short-seller Hindenburg Research has accused Madhabi Puri Buch, the head of India’s market regulator, of previously holding investments in offshore funds associated with the Adani Group.
In a press statement issued late Saturday night, Buch dismissed the allegations as baseless. On Sunday, she issued a personal statement asserting that she had adhered to all disclosure requirements and clarified that her investments in the fund mentioned in Hindenburg’s report were made privately in 2015, two years before she joined the Securities and Exchange Board of India (SEBI).
SEBI also urged investors to remain calm and conduct due diligence before reacting to such reports.
Hindenburg’s report has reignited criticism from opposition political parties in India, who are now demanding a parliamentary investigation.
According to Hindenburg, whistleblower documents reveal that Buch and her husband held stakes in an offshore fund that received significant investments from associates of Vinod Adani, brother of Adani Group Chairman Gautam Adani.
On Sunday, the Adani Group rejected these allegations, stating that its overseas holding structure is fully transparent. A spokesperson for the conglomerate described Hindenburg’s claims as “red herrings” and a deliberate attempt to tarnish the group’s reputation.
“Adani Group has no commercial relationship with the individuals or matters mentioned in this calculated attempt to malign our standing,” the spokesperson stated.
In January 2023, Hindenburg released a report accusing the Adani Group of improper use of tax havens and stock manipulation, which triggered a $150 billion sell-off in the conglomerate’s shares, despite its denials. Although the shares have partially recovered, the 2023 report led to an ongoing inquiry by SEBI, headed by Buch. In May, six Adani Group companies disclosed that they had received notices from SEBI alleging violations of Indian stock market rules.
SEBI has also issued a “show cause” notice to Hindenburg, accusing the short-seller of violating Indian regulations by setting up a short-bet using non-public information. Hindenburg dismissed these allegations in July, calling them “nonsense.”
In its latest report, Hindenburg attempts to link offshore funds that traded in Adani Group shares with personal investments made by Buch and her husband. The report alleges that the Bermuda-based Global Opportunities Fund, reportedly used by entities connected to the Adani Group, had sub-funds in which Buch and her husband invested in 2015, citing whistleblower documents.
Before Buch was appointed as a full-time SEBI member in 2017, her husband reportedly requested to be the sole operator of the account. In 2018, Buch sought to redeem her husband’s entire investment in the fund, according to the whistleblower documents. Buch was later appointed as SEBI’s head in 2022.
“We believe our findings raise questions that merit further investigation. We welcome additional transparency,” Hindenburg stated.
Buch and her husband have responded by stating that their finances are an open book and that they have no hesitation in disclosing any financial documents to relevant authorities. “All required disclosures have already been provided to SEBI over the years,” they said.
The IPE-Plus Fund 1, the sub-fund in which Buch and her husband invested, clarified on Sunday that it had not invested in any shares of the Adani Group, directly or indirectly. The fund’s asset manager added that Buch and her husband’s holdings represented less than 1.5% of the total inflow into the fund.
The 10-company Adani conglomerate, which operates in sectors such as airports, ports, electricity, and gas, has benefited from Prime Minister Narendra Modi’s government’s push to develop India’s infrastructure. The main opposition Congress party has previously alleged close ties between the Adani Group and the ruling Bharatiya Janata Party, claims both have denied.
In a statement posted on social media platform X late on Saturday, a Congress party spokesperson called on the government to “eliminate all conflicts of interest in the SEBI investigation of Adani” and demanded a parliamentary inquiry to “investigate the full scope” of the matter.