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Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, on Sunday said that their investment in the offshore funds, mentioned by Hindenburg Research in its latest allegations, were made in 2015 when they both were ‘private citizens’ living in Singapore.
The investment was made almost two years before Madhabi joined Sebi as a Whole Time Member, they said.
On Saturday, US-based Hindenburg Research, in a post on X (formerly Twitter) alleged that Madhabi and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal. The short-seller alleged that the couple invested in Global Dynamic Opportunities Fund (GDOF), in which Vinod Adani, brother of Gautam Adani, had invested.
GDOF invested in IPE-Plus Fund 1, a small offshore Mauritius Fund, managed by wealth management firm India Infoline (now 360 ONE WAM), Hindenburg claimed. The founder and chief investment officer (CIO) of IPE-Plus Fund was Anil Ahuja, who was also a director of Adani Enterprises, the flagship company of the Adani group, where he served three terms spanning nine years ending in June 2017. According to Hindenburg, Vinod Adani used the offshore fund to invest in Indian markets with funds allegedly siphoned from over invoicing of power equipment to the Adani Group.
“The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined Sebi, even as a Whole Time Member,” Sebi Chairperson and her husband said in a joint statement.
The clarification is in response to the allegations made by Hindenburg Research on Saturday. They have strongly denied the “baseless allegations and insinuations” made in the report.
Adani group and 360 One WAM, the wealth and asset management company, have denied allegations made by Hindenburg Research on August 10. “Sebi has strong institutional mechanisms of disclosure and recusal norms as per the code of conduct applicable to its officers. Accordingly, all disclosures and recusals have been diligently followed, including disclosures of all securities held or subsequently transferred,” the joint statement stated.
Madhabi, an alumnus of IIM Ahmedabad, became a Whole Time Member in the Sebi in 2017 and its Chairperson in March 2022. “The decision to invest in this fund was because the Chief Investment Officer, Anil Ahuja, is Dhaval’s childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, J.P. Morgan and 3i Group plc, had many decades of a strong investing career. The fact that these were the drivers of the investment decision is borne out by the fact that when, in 2018, Ahuja, left his position as CIO of the fund, we redeemed the investment in that fund,” it said. The joint statement of the Sebi chairperson and her husband said that as confirmed by Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company.
360 One WAM in a statement issued on Sunday said that throughout the fund’s tenure, IPE-Plus Fund 1 made zero investments in any shares of the Adani group either directly or indirectly through any fund. At its peak, the fund’s Assets Under Management (AUM) reached approximately $48 million, with over 90 percent of the fund consistently invested in bonds. “Madhabi Buch & Dhaval Buch’s holdings in the fund were less than 1.5 per cent of the total inflow into the fund,” 360 One WAM said.
Ports-to-energy conglomerate, Adani group, in a statement said that the latest allegations by Hindenburg are malicious, mischievous and manipulative selections of publicly available information to arrive at pre-determined conclusions for personal profiteering with wanton disregard for facts and the law. “We completely reject these allegations against the Adani Group which are a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Honorable Supreme Court in March 2023,” Adani group said in a clarification.
The Adani Group said it has “absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing”. The group said it remains steadfastly committed to transparency and compliance with all legal and regulatory requirements. “For a discredited short-seller under the scanner for several violations of Indian securities laws, Hindenburg’s allegations are no more than red herrings thrown by a desperate entity with total contempt for Indian laws,” the group said.
Hindenburg Research also alleged that during Madhabi Buch’s tenure as a Whole Time Member at Sebi, her husband was appointed as a senior advisor to Blackstone, the world’s largest alternative asset manager, in 2019. Dhaval had not worked for a fund, in real estate or capital markets before, per his linkedin profile, the short-seller claimed.
“Dhaval’s appointment, in 2019, as Senior Advisor to Blackstone Private Equity was on account of his deep expertise 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,” Sebi chairperson and her husband said in the joint statement.
On Dhaval’s appointment, the Blackstone Group was immediately added to Madhabi’s recusal list maintained with Sebi, the statement said. “Over the last two years, Sebi has issued more than 300 circulars (including “Ease of Doing Business” initiatives in line with the developmental mandate of Sebi) across the entire market eco-system. All regulations of Sebi are approved by its Board (and not by its Chairperson) after extensive public consultation. Insinuations that a handful of these matters related to the REIT industry were favours to any specific party are malicious and motivated,” the joint statement by the Sebi Chairperson and her husband said.
“During this long period, Madhabi and Dhaval have accrued their savings through their salaries, bonuses and stock options. Insinuations about their net worth and investments referencing Madhabi’s current government salary are malicious and motivated,” the joint statement said.
The two consulting companies set up by Madhabi during her stay in Singapore, one in India and one in Singapore, became immediately dormant on her appointment with Sebi. These companies (and her shareholding in them) were explicitly part of her disclosures to Sebi. After Dhaval retired from Unilever in 2019, he started his own consultancy practice through these companies.
