Hindenburg Report: Top 6 Allegations on SEBI Chaiperson Madhabi Puri Buch

Approximately 18 months have already passed since Hindenburg Research raised concerns about the stock manipulation within the Adani group. Now the U.S.-based short seller has come up with a new claim that India's stock market regulator SEBI has a hand in this scandal. Hindenburg has named this scandal as the "Adani money siphoning scandal."

On the basis of documents provided by a whistleblower, Hindenburg Research has accused SEBI chairperson Madhabi Puri Buch and her husband, Dhaval Buch, of holding stakes in offshore funds based in Bermuda and Mauritius through complicated arrangements. The report also alleges that just weeks before Madhabi Puri Buch was appointed as a full-time SEBI member in 2017, her husband requested a Mauritius fund administrator to make him the "sole person authorized to operate the accounts."

Top 6 Allegations by Hindenburg:

• Lack of Action on Adani's Alleged Offshore Network: Hindenburg criticized SEBI for not thoroughly investigating the Adani Group's alleged network of hidden offshore entities in Mauritius. They claimed that an Adani director set up a small offshore fund called the "IPE Plus Fund" through India Infoline Ltd (IIFL), which Vinod Adani, Gautam Adani's brother, allegedly used to funnel money out of the Adani Group and invest in Indian markets.
• Involvement of SEBI Chairperson and Her Husband: Hindenburg has also claimed that SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had investments in offshore funds tied to the Adani Group's alleged money laundering activities. They pointed out that Madhabi Puri Buch owned a 100% interest in an offshore Singaporean consulting firm called Agora Partners until she transferred it to her husband just two weeks after becoming SEBI chairperson.
• Conflict of Interest with Blackstone: Hindenburg claimed that while Madhabi Puri Buch was a SEBI official, her husband was appointed as a senior adviser to Blackstone, even though he had no prior experience in real estate or capital markets. During his tenure, Blackstone sponsored two major real estate investment trusts (REITs) in India, which received SEBI approval for IPOs. Hindenburg also noted that SEBI made significant changes to India's REIT regulations during this time, potentially benefiting Blackstone.
• Undisclosed Promotion of REITs: Hindenburg accused Madhabi Puri Buch of promoting REITs at industry conferences without disclosing her husband's connection to Blackstone, which stood to gain from the asset class.
• Consulting Firm Earnings: Hindenburg pointed out that Madhabi Puri Buch allegedly owned 99% of an Indian consulting company, Agora Advisory, which earned significantly more from consulting than her disclosed SEBI salary.
• Supreme Court Remarks: India's Supreme Court noted that SEBI's investigations into the funding of Adani's offshore shareholders had "drawn a blank." Hindenburg suggested that SEBI could have started its investigation by looking into its own chairperson's involvement.

However, Madhabi Puri Buch and her husband, Dhaval Buch, have strongly denied these allegations. They called the Hindenburg report "baseless," "false," and an attempt at their "character assassination."

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