Hindenburg Research Accuses SEBI Chief Madhabi Buch of Conflict of Interest in Adani Probe
11.08.2024: In a shocking development, U.S.-based short seller Hindenburg Research has leveled serious allegations against Madhabi Puri Buch, the chairperson of India’s Securities and Exchange Board (SEBI). The report, released on August 10, 2024, claims that Buch and her spouse, Dhaval Buch, had financial ties to offshore funds linked to the Adani Group, which is currently under investigation for alleged malpractices.
Allegations of Offshore Holdings
According to Hindenburg Research, both Madhabi and Dhaval Buch held stakes in offshore entities based in Bermuda and Mauritius, using complex financial structures to mask their involvement. These offshore funds are allegedly connected to the broader network of entities involved in what Hindenburg describes as the “Adani money siphoning scandal.”
The short seller’s report cites documents from a whistleblower, which indicate that just weeks before Madhabi Buch’s appointment as a whole-time member of SEBI in 2017, Dhaval Buch had taken steps to gain control over a Mauritius-based fund. Specifically, he had written to a fund administrator, requesting to be the sole person authorized to operate the accounts. This move, according to Hindenburg, raises questions about a potential conflict of interest, given SEBI’s ongoing investigation into the Adani Group.
Questions of Regulatory Integrity
Hindenburg Research’s latest revelations have sparked concerns over the integrity of SEBI’s investigation into the Adani Group. The report suggests that the regulator’s probe may have been compromised due to a reluctance to pursue leads that could implicate its own chairperson. Hindenburg further alleges that this situation could point to a broader issue of regulatory “conflict or capture,” where those in power are unduly influenced by external financial interests.
Adding to the controversy, the report also flags the existence of consulting firms, both offshore and onshore, owned by Madhabi Buch and her husband. These firms, according to Hindenburg, may have further complicated the SEBI chief’s impartiality in overseeing the Adani investigation.
Implications for the Adani Investigation
The allegations against Madhabi Buch come almost 18 months after Hindenburg first brought attention to the Adani Group’s alleged involvement in stock price manipulation and financial misconduct. SEBI’s role in investigating these claims has been under scrutiny, and these latest accusations only intensify the pressure on the regulator to ensure a transparent and thorough probe.
As the situation unfolds, the integrity of India’s financial regulatory framework is at stake. If proven true, the allegations against SEBI’s chairperson could have far-reaching implications, not only for the Adani investigation but also for the trust placed in India’s market regulators.
Hindenburg Research’s accusations against SEBI Chief Madhabi Buch have added a new layer of complexity to the ongoing Adani Group probe. With allegations of offshore holdings and potential conflicts of interest, the situation calls for a closer examination of the ties between regulators and the entities they oversee. As the story develops, the need for transparency and accountability in financial regulation has never been more crucial.