While 'strongly' denying allegations and insinuations made in the Hindenburg Research report, Madhabi Puri Buch, the chairperson of Securities and Exchange Board of India (SEBI) and her husband Dhaval Buch says 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."
Further, Mr Buch, a senior adviser at Blackstone since 2019, is not associated with the real estate side of the private equity major, they say, adding, "Dhaval's appointment, in 2019, as senior advisor to Blackstone was on account of his deep knowledge in supply chain management. Thus, his appointment pre-dates Madhabi's appointment as SEBI chairperson. This appointment has been in the public domain ever since. At no time has Dhaval been associated with the real estate side of Blackstone. On his appointment, the Blackstone group was immediately added to Madhabi's recusal list maintained with SEBI."
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. Whistle-blower 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 whistle-blower 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.
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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