On Saturday, US-based short-seller Hindenburg Research released a report alleging that Madhabi Puri Buch, the chairperson of India's market regulator, had previously invested in certain offshore funds linked to the Adani Group. Buch swiftly refuted these claims in a late-night press release, labeling them as baseless and promising a more detailed response later. The report from Hindenburg has reignited criticism from India's opposition parties, which are calling for a parliamentary investigation.
Hindenburg's report, based on whistleblower documents, claims that Buch and her husband held stakes in an offshore fund where significant investments were made by associates of Vinod Adani, the brother of Adani Group's chairman, Gautam Adani. Adani Group has previously denied similar allegations, and they have yet to respond to a recent email inquiry. Hindenburg's January 2023 report, which accused Adani Group of improper use of tax havens and stock manipulation, led to a $150 billion sell-off in the conglomerate's stocks, despite denials from Adani. The stocks have since partially rebounded.
The 2023 report also prompted an ongoing investigation by the Securities and Exchange Board of India (SEBI), which in May issued notices to six Adani Group companies for alleged violations of stock market rules. SEBI also issued a 'show cause' notice to Hindenburg Research, accusing the short-seller of violating country rules by setting up a short-bet using non-public information. Hindenburg dismissed these allegations as 'nonsense' in a July statement.
In its latest report, Hindenburg links Buch's personal investments to offshore funds that traded in Adani Group shares. It alleges that Buch and her husband were investors in a sub-fund of the Bermuda-based Global Opportunities Fund, which was reportedly used by Adani-linked entities to trade in group company shares. Hindenburg cites whistleblower documents indicating that in 2017, Buch's husband requested to manage the account alone, and in 2018, Buch sought to redeem his entire investment.
Buch and her husband issued a joint statement affirming that their financial dealings are transparent and that they are willing to disclose all documents to any authority. They emphasized that all necessary disclosures have been made to SEBI. The Adani Group, a conglomerate operating in various sectors including infrastructure, has benefited from the Narendra Modi-led government's infrastructure development initiatives. The main opposition Congress party has accused the Adani Group of close ties with the ruling Bharatiya Janata Party (BJP), a claim both parties deny.
The Congress party spokesperson urged the government to eliminate any conflicts of interest in SEBI's investigation of Adani and called for a parliamentary probe to fully investigate the matter.
