Hindenburg case: The investment was two years before Madhavi joined SEBI – Buch

News Bureau,August 11,2024

Hindenburg Research’s latest allegations have been rejected by SEBI chief Madhabi Puri Buch and her husband Dhawal Buch. They shared a detailed statement on Sunday. Buch said that his investment in the fund, which Hindenburg claimed was linked to the alleged ‘Adani stock manipulation’, was made two years before Madhabi joined SEBI.

His clarification comes after the US-based short-seller firm on Saturday claimed that whistleblower documents show that SEBI chairperson Madhabi Puri Buch had stakes in suspicious offshore entities used in the Adani money siphoning scandal. It has alleged that this is why she did not take action in the matter of earlier disclosures about Adani. Hindenburg Research has raised the question of conflict of interest involving market regulator SEBI.

Hindenburg is a US-based investment research firm that specializes in activist short-selling. Its latest report comes nearly 18 months after it first raised a political storm in January 2023. In a report dated January 24 last year, Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud. The report said that in its research, it spoke to dozens of individuals, including former senior officials of the Adani Group, examined thousands of documents and visited the site in about half a dozen countries to investigate it.

The Hindenburg report revealed an alleged nexus of shell companies controlled by the Adani family in tax havens spanning the Caribbean countries, Mauritius and the United Arab Emirates. Since then, the Adani Group has consistently denied these allegations. Last year, on that allegation of Hindenburg Research, the Adani Group had said that such an allegation was made with malicious, baseless, one-sided and intended to ruin their share sale.

Meanwhile, a fresh report from Hindenburg has come in which questions have been raised on the investment of the SEBI chief. On these allegations, SEBI chief Buch has said in a statement that his investment in IPE-Plus Fund 1 promoted by 360 One Asset and Wealth Management (IIFL Wealth Management) was made as a Singapore-based private citizen.

They said in the statement, ‘From 2010 to 2019, Dhawal lived and worked in London and Singapore – both with Unilever. From 2011 to March 2017, Madhabi lived and worked in Singapore. Initially as an employee of a private equity firm and later as a consultant. The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and even before Madhabi joined SEBI as a full-time member, about 2 years ago.’ They have said that ‘at no time did the fund invest in any bonds, equities or derivatives of any Adani Group company’.

The decision to invest in that fund was taken on the advice of a childhood friend, the statement said. The statement further said that Madhabi’s two consulting companies became inactive immediately after her appointment as a full-time member in SEBI in 2017.

Madhabi and Dhawal also accused Hindenburg Research of attacking the credibility of SEBI and indulging in character assassination of its chairman.

The statement said, “Hindenburg has been issued a show cause notice for various violations in India. It is unfortunate that instead of responding to the show cause notice, they have chosen to attack the credibility of SEBI and attempt character assassination of the SEBI chairman.”

Asset management company 360 One also said that its IPE-Plus Fund 1 has never made any investment in Adani Group shares, India Today reported. In a statement, it said that Buch’s holdings were less than 1.5 per cent of the total investments in the fund and stressed that none of the investors had any involvement in the fund’s operations or investment decisions.

Adani Group also denied the allegations
The Adani Group has termed the claims of Hindenburg Research as malicious, mischievous and manipulative. Adani has given this statement after his name appeared in the report of Hindenburg Research.

In a statement, the Adani Group on Sunday said that the latest allegations are re-levelled discredited claims which have been proven baseless in court. It said in an exchange filing, ‘The latest allegations made by Hindenburg are malicious, mischievous and distorted of publicly available information. These are made to reach pre-determined conclusions for personal profiteering by twisting facts and law. We completely reject these allegations against the Adani Group. These are re-levelled discredited claims, which have been thoroughly investigated, proven baseless and which have already been rejected by the Hon’ble Supreme Court in January 2024.’