Gautama AdaniImage credit source: PTI
American investment and research firm Hindenburg Research has accused the chairman of market regulator Securities and Exchange Board of India (SEBI), Madhavi Puri Buch, and her husband of having stakes in foreign funds linked to Adani. However, the SEBI chief has termed the allegation as completely baseless. On the other hand, the Adani Group’s statement has also come in this matter. Adani Group has made it clear that its group has no business relations with the SEBI chief. Hindenburg is making baseless allegations.
Hindenburg, in its new report released on Saturday evening, said that SEBI chairperson Buch and her husband Dhabal Buch have stakes in the foreign funds that were used for alleged embezzlement in the Adani Group. Meanwhile, the Congress has demanded that the Centre take immediate steps to remove all conflicts of interest in the regulatory probe into the Adani Group. The opposition party has also demanded the creation of a JPC to unearth the alleged links between top officials in the country and thoroughly investigate the scam.
no relationship
Responding to the Hindenburg report, Adani Group said that the Adani Group has no business connection with the individuals or cases mentioned in the report. Rejecting all allegations, the group says it rejects the allegations levelled against its companies and reiterates that the structure of its foreign holding company is completely transparent. The Hindenburg report says the Adani Group has diverted funds from one place to another by weaving a web of companies.
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He called the accusations baseless.
The SEBI chief and her husband issued a joint statement rejecting Hindenburg’s allegations and terming them as completely baseless. She said that the allegations made in the report are completely baseless and baseless. There is no truth in this. Our life and financial situation is like an open book. Over the years, all necessary disclosures have already been provided to SEBI. We do not hesitate to disclose any financial document. Buch said that it is unfortunate that in response to Hindenburg Research, against which SEBI took coercive action and issued a show-cause notice, an attempt has been made to corner and defame us. She also said that keeping in mind complete transparency, a detailed statement will be issued in due course.
Hindenburg’s allegations against the SEBI chief
In a blog post 18 months after its previous report on Adani, Hindenburg alleged that SEBI has shown a surprising lack of interest in investigating Adani’s alleged undeclared network in Mauritius and shell units abroad. Citing whistleblower documents, the investment firm said that current Sebi chief Butch and his husband, allegedly the elder brother of group chairman Gautam Adani, held stakes in offshore shady funds used in the Adani Group’s fund misappropriation scam, while Vinod Adani controlled offshore shady funds in Bermuda and Mauritius. Hindenburg alleges that these funds were used to launder funds and boost the group’s share price.
How much is Butch’s net worth?
In its latest report, Hindenburg claims that the fund’s advertisement, signed by an IIFL chief, states that the source of investment is salary and that the couple’s net worth is estimated at $10 million. The report alleges that documents show that despite having thousands of reputable Indian mutual fund products, SEBI chairman Madhavi Buch and her husband had acquired stakes in a multi-layered offshore fund with low assets.
Hindenburg said its assets passed through high-risk jurisdictions. It was held by a company allegedly linked to the scam. This is the same entity run by Adani directors and significantly used by Vinod Adani in the alleged Adani cash embezzlement scam. Funds that invest in foreign markets are called offshore funds. They are also called foreign funds. The Supreme Court order is also cited in the report. In which it was said that SEBI was left empty-handed while investigating who was funding Adani’s alleged foreign shareholders.
This came to light
Hindenburg said that if SEBI really wanted to find foreign fund holders, perhaps the SEBI chairperson could have started by looking in the mirror. He said that we are not surprised that SEBI did not want to pursue a matter that fell on its own boss. Hindenburg said that the current SEBI chairperson and her husband Dhaval Buch concealed their involvement in the same shadowy offshore funds in Bermuda and Mauritius that were found to be in the same complex structure used by Vinod Adani.
According to the report, documents obtained from a whistleblower show that Dhaval Buch had written an email to the Mauritius-based fund manager Trident Trust on March 22, 2017, a few weeks before Buch was appointed as the SEBI chairman. This email was about his and his wife’s investment in the Global Dynamic Opportunities Fund (GDOF).
These accusations were made 18 months ago.
Earlier in January, Hindenburg Research had alleged that the Adani Group was involved in blatant stock manipulation and accounting fraud. However, the group termed this allegation as completely baseless. It said that this was done with nothing but a malicious intent to harm the sale of its shares. At that time, Adani Enterprises, the flagship company of the Adani Group, was preparing to launch an FPO worth Rs 20,000 crore.
Groups working in sectors ranging from ports to energy have claimed that the report has been prepared solely on erroneous and unfounded selective information and is entirely malicious in its aim. The facts on the basis of which the report was prepared have also been rejected by Indian courts. Shares of the Adani Group fell following the report, though it later managed to recover from the loss.
