On Friday, the U.S.-based short-selling firm Hindenburg created a stir by posting a cryptic message on X, hinting at a significant revelation concerning India. The post read, “Something big soon India,” signaling the release of a major disclosure.
On Saturday, Hindenburg published a report claiming that whistleblower documents revealed Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and her husband held stakes in obscure offshore entities allegedly involved in the ‘Adani money siphoning scandal.’
This report follows a series of events where SEBI issued a ‘show cause’ notice to Hindenburg after it published a report in January last year accusing the Adani Group of ‘brazen stock manipulation and accounting fraud.’
The Hindenburg report stated, “We had previously noted Adani’s confidence in operating without serious regulatory intervention, possibly due to Adani’s relationship with SEBI Chairperson, Madhabi Buch. What we hadn’t realized: the current SEBI Chairperson and her husband, Dhaval Buch, had hidden stakes in the same obscure offshore Bermuda and Mauritius funds used by Vinod Adani.”
In response, Madhabi Puri Buch and Dhaval Buch rejected the allegations, calling them “groundless” and “without merit.” They asserted that their financial records were transparent and described the claims as an attempt at “character assassination.” They issued a detailed joint statement clarifying that their investment in the fund linked by Hindenburg to the alleged “Adani stock manipulation” was made two years before Madhabi joined SEBI.
The Buchs stated that they invested in IPE Plus Fund 1, managed by 360 ONE Asset and Wealth Management (formerly IIFL Wealth Management), in 2015, while living as private citizens in Singapore, nearly two years before Madhabi became a Whole Time Member of SEBI.
The statement further explained that the decision to invest in the fund was influenced by their confidence in the fund’s Chief Investment Officer, Anil Ahuja, a longtime friend of Dhaval Buch and a seasoned professional. When Ahuja left the fund in 2018, they redeemed their investment. Additionally, the statement clarified that the fund never invested in any Adani Group shares.
360 ONE Asset and Wealth Management also issued a clarification, stating that IPE-Plus Fund 1 never invested in Adani Group shares directly or indirectly.
The Hindenburg report also alleged that before her appointment at SEBI, Madhabi Buch had her husband transfer their investments to avoid scrutiny and that she used her private Gmail account to redeem fund units through her husband’s name in February 2018.
SEBI dismissed Hindenburg’s allegations that changes to Real Estate Investment Trust (REIT) rules were influenced by Dhaval Buch, who works for Blackstone, and offshore funds linked to the Adani Group.
Vinod Nair, Head of Research at Geojit Financial Services, noted that the Indian market ended relatively flat, with the ongoing Adani-Hindenburg-SEBI saga impacting its trajectory. However, positive cues from global markets and expectations of easing CPI inflation, supported by a good monsoon, helped the market overlook these issues. Nonetheless, risks remain due to firm oil prices and potential volatility in food inflation.