Written By- Himanshu
Reviewed By- Shaktikant
Fresh Allegations Against SEBI Chairperson
In a fresh wave of allegations, Hindenburg Research, known for its earlier claims against billionaire Gautam Adani, has now accused the Chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, of having hidden stakes in offshore funds associated with the Adani conglomerate.
Claims of Hidden Offshore Stakes
Hindenburg, in a report released on its website, claimed that both Madhabi Puri Buch and her husband, Dhaval Buch, were involved in offshore Bermuda and Mauritius funds that were also allegedly utilized by Vinod Adani, Gautam Adani’s elder brother. The report suggests that these funds were part of a complex structure used by Vinod Adani to invest in Indian markets, with money supposedly passed off through the over-invoicing of power equipment supplied to the Adani Group.
Details of the Alleged Offshore Fund Connections
The report draws on whistleblower documents that indicate the Buchs had opened an account with IPE Plus Fund 1 on June 5, 2015, in Singapore. This offshore fund, registered in Mauritius, is said to have been established by an Adani director through IIFL, a financial services company.
Hindenburg further alleges that the IPE Plus Fund had close connections to the Adani Group, citing the fund’s Chief Investment Officer, Anil Ahuja, who was simultaneously a director at Adani Enterprises for nine years, ending his term in June 2017.
Implications of the Allegations
Hindenburg argued that these alleged ties might explain Adani’s perceived confidence in evading serious regulatory scrutiny. “Adani’s relationship with SEBI Chairperson, Madhabi Buch, might provide an explanation for the regulatory leniency,” the report stated.
Additionally, the whistleblower claimed that Vinod Adani-controlled funds had invested in the Global Dynamic Opportunities Fund (GDOF) in Bermuda, which then funneled money into IPE Plus Fund 1. This claim is supported by a separate investigation by the Financial Times, which found that GDOF’s parent fund had been used by Adani associates to accumulate and trade significant positions in Adani Group shares.
Criticism of SEBI’s Regulatory Actions
Hindenburg criticized SEBI’s inaction against other questionable shareholders of Adani Group entities, suggesting that this reluctance may be linked to Madhabi Buch’s alleged involvement in similar offshore structures.
Connections to Consulting and Real Estate Investment Trusts (REITs)
The report highlighted that Madhabi Buch owns 99% of a consulting business, Agora Advisory, where her husband is a director. It claimed that this entity reported $261,000 in revenue from consulting in 2022, which is 4.4 times Buch’s disclosed salary at SEBI. The report pointed out that the revenue sources remain undisclosed due to the Singaporean entity’s exemption from financial reporting.
Hindenburg also questioned SEBI’s objectivity, noting that despite Buch’s promotion of Real Estate Investment Trusts (REITs) as a promising investment class, she did not disclose that her husband’s advisory role at Blackstone, a significant player in the REIT space, could benefit from these statements.
Conclusion: Questions on SEBI’s Objectivity
The report concludes by questioning SEBI’s credibility as an impartial regulator in the Adani case, asserting that the proceeds from Hindenburg’s report will be donated to organizations supporting free expression.
