Hindenburg rebuts SEBI chief’s rebuttal

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Hindenburg Research alleges ‘massive conflict of interest’ against SEBI chief

By Our Special Correspondent

New Delhi, August 12: In a thread on X, formerly twitter, the Hindenburg Research has rebutted the rebuttal of the SEBI chairperson Madhabi Puri Buch that she had no conflict of interest while heading the stock market regulator. The US-based short seller asked if the husband Buch dealt with entities which the “SEBI is tasked to regulate”.

“Buch said her husband used the consulting entities starting in 2019 to transact with unnamed prominent clients in the Indian industry. Do these include clients SEBI is tasked with regulating,” asked the Hindenburg in a fresh spell of allegations against the chairperson of the Securities and Exchange Board of India (SEBI).

Leader of the Opposition in the Lok Sabha and senior Congress leader, Rahul Gandhi, has claimed that the allegations levelled by the Hindenburg Research questions the integrity of the regulator and also the neutrality. “Imagine there is a match between Indian and Australia cricket team, and you find that the umpire is compromised,” said Gandhi in a video post on X.

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The Congress is going overboard to further sharpen attacks on Prime Minister Narendra Modi. The Congress is demanding the constitution of the joint parliamentary committee (JPC) to probe the allegations of the Hindenburg Research. The Supreme Court had last year rejected the plea for the JPC probe, while tasking the SEBI to go to the bottom of the allegations levelled by the Hindenburg research against the Adani Group.

“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,” asked Hindenburg in its fresh spell of allegations.

The US-based short-seller also asked, “will the SEBI Chairperson commit to a full, transparent and public investigation into these issues?”

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The Hindenburg Research also asserted that “Buch’s response now publicly confirms her investment in an obscure Bermuda/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”.

It also stated that the “SEBI was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms. Buch WAS PERSONALLY INVESTED IN and funds by the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest”.

The Bharatiya Janata Party (BJP) has accused the Congress of seeking to instigate financial chaos in the country. But there had been a number of stock market scams in the recent decades which were probed by the JPC.

“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 March 31st, 2024, Agora Advisory Limited (India), is still 99 per cent owned by Madhabi Buch, not her husband. This entity is currently active and generating consulting revenue,” added the Hindenburg Research. It furthermore stated that “Buch remained a 100 per cent shareholder of Agora Partners Singapore until March 16th, 2022, per Singaporean records, owning it during her entire time as a SEBI Whole Time Member. She only transferred her shares into her husband’s name two weeks after her appointment as SEBI Chairperson”.

Watch: Hindenburg Report I राहुल गांधी ने JPC जांच की अपनी मांग दोहराई I अंपायर पर सवाल I

The US-based short-seller also stated that whistleblower documents showed that “Buch used her personal email to do business using her husband’s name while serving as a Whole Time Member of SEBI. In 2017, weeks ahead of her appointment as SEBI Whole Time Member, she ensured the accounts with ties to Adani ‘be registered solely in the name of Dhaval Buch’, her husband, per whistleblower documents”.

It further alleged that “despite disclaiming control, a private email she sent a year into her SEBI term shows she redeemed stakes in the funds through her husband’s name, per the whistleblower documents. This raises the question: What other investments or business has the SEBI Chairperson engaged in through her husband’s name while serving in an official capacity?”