US short-seller Hindenburg Research, in a series of posts on X, says since Madhabi Puri Buch, the chairperson of Securities and Exchange Board of India (SEBI), has now publicly confirmed her investment in an obscure Bermuda and Mauritius fund structure, she should come clean on all the consulting clients her offshore Singaporean as well as Indian consulting firms dealt with.
Hours after Ms Buch and her husband Dhaval issued a statement calling Hindenburg's latest outbursts as an attack on the credibility of SEBI and attempted 'character assassination', the short-seller says their (the Buchs) response includes several important admissions and raised numerous new critical questions.
It says, "(The) Buchs response now publicly confirms her (Ms Buch's) investment in an obscure Bermuda and Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani. She also confirmed the fund was run by a childhood friend of her husband, who at the time was an Adani director."
Hindenburg says Ms Buch's statement also claims that the two consulting companies she set up, including the Indian entity and the opaque Singaporean entity, 'became immediately dormant on her appointment with SEBI' in 2017, with her husband taking over starting in 2019.
"Per its latest shareholding list as of 31 March 2024, Agora Advisory Ltd (India), is still 99% owned by Madhabi Buch, not her husband. This entity is currently active and generating consulting revenue. Furthermore, Ms Buch remained a 100% shareholder of Agora Partners Singapore until 16 March 2022, per Singaporean records, owning it during her entire time as a SEBI whole time member (WTM). She only transferred her shares into her husband's name two weeks after her appointment as SEBI chairperson," Hindenburg says.
Hindenburg also alleged that the whistle-blower documents it has, show that Ms Buch used her personal email to do business using her husband's name while serving as a WTM of SEBI.
"Ms Buch's statement promised a 'commitment to complete transparency'. Given this, will she publicly release the full list of consulting clients and details of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm and any other entity she or her husband may have an interest in? Finally, will the SEBI chairperson commit to a full, transparent and public investigation into these issues?" Hindenburg asks.
On Saturday, Hindenburg alleged that the SEBI chairperson had a stake in obscure offshore entities used in the Adani money siphoning scandal.
Quoting
whistle-blower documents, Hindenburg says, "We had previously noted Adani's total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani's relationship with SEBI chairperson, Madhabi Buch. Whistleblower documents show that Ms Buch, the current chairperson of SEBI, and her husband had stakes in both obscure offshore funds used in the Adani money siphoning scandal."
Quoting media reports about Adani group chief Gautam Adani's meeting with the SEBI chief, Hindenburg says, "What we had not realised: the current SEBI chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani."
It alleges that Ms Buch and her husband first appeared to have opened their account with IPE Plus Fund 1 on 5 June 2015 in Singapore, per whistleblower documents. "A declaration of funds, signed by a principal at IIFL, states that the source of the investment is 'salary' and the couple's net worth is estimated at US$10mn (million)," Hindenburg says.
While 'strongly' denying allegations and insinuations made in the Hindenburg report, the SEBI chairperson and her husband Dhaval Buch say the US-based short-seller is attempting to attack SEBI's credibility and indulging in character assassination of the chairperson.
In a detailed statement issued on Sunday evening, the Buchs say their investment in a fund promoted by IIFL Wealth Management was as Singapore-based private citizens and made two years before Ms Buch joined SEBI as a whole-time member (WTM). "The decision to invest in this fund was because the chief investment officer (CIO), Anil Ahuja, is Dhaval's childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, JP Morgan and 3i Group Plc, had many decades of strong investing career. The fact that these were the drivers of the investment decision is borne out of the fact that when, in 2018, Mr Ahuja left his position as CIO of the fund, we redeemed the investment in that fund. As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company."
On 24 January 2023, the short-seller accused the Adani group of engaging in long-term stock manipulation and accounting fraud through a network of offshore entities.
SEBI says the allegations (made by Hindenburg), ranging from using offshore investment funds to inflate stock price and non-disclosure of related party interest that Hindenburg first levied in its damning report against the Adani group in January 2023, have been 'duly investigated'.
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