- Hindenburg Research has intensified its conflict with India’s stock market regulator, Sebi, and its chairperson, Madhabi Puri Buch, by alleging conflicts of interest and new instances of financial misconduct related to the Adani Group.
The allegations from the U.S. short-seller emerged shortly after Sebi and Buch, along with her husband, strongly refuted claims of favoritism towards business magnate Gautam Adani and his enterprises. In a joint statement, the Buchs characterized the accusations as “unfounded allegations and insinuations” lacking any basis in reality.
Hindenburg, which has been engaged in a contentious public dispute with the conglomerate since releasing a damning report in January of the previous year that accused the company of corporate wrongdoing and stock manipulation, referenced whistleblower documents to substantiate its assertions.
In a statement on X, Hindenburg remarked, “Sebi Chairperson Madhabi Buch’s response to our report includes several significant admissions and raises numerous new critical questions.”
In response to the Buchs’ denial of any misconduct, Hindenburg contended that their reply to the report effectively confirms their investment in a little-known fund structure based in Bermuda/Mauritius, which is allegedly linked to funds misappropriated by Vinod Adani, the brother of Gautam Adani.
Madhabi Buch confirmed that the fund was managed by a childhood acquaintance of her husband, who was serving as a director at Adani at that time. The Securities and Exchange Board of India (Sebi) was assigned to investigate investment funds associated with the Adani situation, which included funds in which Ms. Buch had personal investments, as well as those from the same sponsor that were specifically mentioned in our initial report. The firm stated, “This clearly represents a significant conflict of interest.”
Furthermore, the short-seller accused Buch of operating active consulting firms while holding the position of Sebi chief. They raised concerns regarding the transparency of Buch’s consulting enterprises, established during her tenure in Singapore, highlighting that one of these firms, Agora Advisory Limited (India), remained 99 percent owned by Buch and was generating income while she was overseeing investigations into the Adani Group. Hindenburg also claimed that Buch utilized her personal email for business transactions under her husband’s name during her tenure as a Whole Time Member of Sebi.
“Hindenburg inquired, ‘Buch’s statement assured a commitment to complete transparency. In light of this, will she publicly disclose the complete list of consulting clients and the specifics of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm, and any other entity in which she or her husband may have an interest? Additionally, will the Sebi Chairperson pledge to conduct a thorough, transparent, and public investigation into these matters?’”
The Buchs and their affiliated firm, 360-One, refuted any allegations of misconduct, asserting that the fund in question did not invest in Adani securities. They also emphasized that the Buchs held a minimal stake in the fund and had no sway over investment decisions. In response, Sebi defended its management of the Adani-Hindenburg issue, stating that 23 out of 24 investigations have been completed, with one nearing conclusion. The market regulator attributed the prolonged process to complex enforcement procedures.