IN WHAT RAISES questions of conflict of interest related to the market regulator, the US-based Hindenburg Research on Saturday alleged that “it suspects SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from SEBI Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani.”
Madhabi Puri Buch and her husband Dhaval Buch said in a statement that they strongly denied the “baseless allegations and insinuations made in the report”. “The same are devoid of any truth. Our life and finances are an open book,” they said in a joint statement.
On Sunday morning, the Adani Group also rubbished the claims, calling it “malicious and manipulative”.
In an exchange filing, the Adani Group said: “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 Hon’ble Supreme Court in January 2024.”
Madhabi Puri Buch became a Whole-time Member in the Securities and Exchange Board of India (Sebi) in 2017 and its Chairperson in March 2022.
This report by Hindenburg Research comes almost 18 months after it had first kicked up a political storm in January 2023, alleging the Adani Group of “brazen stock market manipulation” and “accounting fraud”. The port-to-energy conglomerate had denied all these allegations; the Supreme Court had rejected the demand for a CBI or court-monitored probe.
Continuing with the saga and quoting “whistleblower documents”, Hindenburg Research has now claimed that the Sebi chairperson “had stake in obscure offshore entities used in the Adani money siphoning scandal.” To date, SEBI has taken no action against other suspect Adani shareholders operated by India Infoline: EM Resurgent Fund and Emerging India Focus Funds, it alleged.
While Congress said the Hindenburg revelations only reinforced its demand for setting up a “joint parliamentary committee to investigate the full scope of the Adani mega scam”, the Trinamool Congress said the Sebi chairperson must resign. “This raises fresh questions about Gautam Adani’s two 2022 meetings in quick succession with Ms Buch shortly after she became SEBI chairperson. Recall that SEBI was supposedly investigating Adani transactions at the time,” Congress’s Jairam Ramesh said.
“Sebi Chairman should be suspended in no time pending Supreme Court monitored investigation and look out notices to be issued to all airports and interpol from preventing her and the husband to leave the country,” said a TMC spokesperson.
On March 22, 2017, just weeks ahead of Madhabi Puri Buch’s appointment as Sebi Wholetime Member, the Hindenburg Research alleged that Madhabi’s husband, Dhaval Buch, wrote to Mauritius fund administrator Trident Trust, according to documents it received from the whistleblower. The email was regarding his and his wife’s investment in the Global Dynamic Opportunities Fund (GDOF), the US firm alleged.
“In the letter, Dhaval Buch requested to “be the sole person authorised to operate the Accounts”, seemingly moving the assets out of his wife’s name ahead of the politically sensitive appointment,” Hindenburg alleged. Dhaval Buch, husband of Madhabi Puri Buch, is currently a senior advisor at Blackstone and at Alvarez & Marsal. He also serves as a non-executive director on the Board of Gildan.
“In a later account statement dated February 26, 2018, addressed to Madhabi Buch’s private email, the full details of the structure are revealed: “GDOF Cell 90 (IPEplus Fund 1)”. Again, this is the exact same Mauritius-registered “cell” of the fund, found several layers deep in a convoluted structure, reportedly used by Vinod Adani,” the firm alleged.
The total value of Buch’s stake was worth US $872,762.25 at the time, Hindenburg said.
Madhabi Puri Buch and Dhaval Buch said, “All disclosures as required have already been furnished to SEBI over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them. Further, in the interest of complete transparency, we would be issuing a detailed statement in due course.”
“It is unfortunate that Hindenburg Research against whom SEBI has taken an Enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same,” the two said in their statement.
Madhabi Puri Buch, who started her career in ICICI Bank in 1989, left the bank in 2011 and moved to Singapore to join Greater Pacific Capital. Between 2011 and 2017, she worked in different capacities in the corporate sector. She became a SEBI Whole-time Member in 2017 and its Chairperson in March 2022.
In July 2024, the Supreme Court had dismissed a plea seeking to review its January 3, 2024, verdict that had sought investigation by the market watchdog SEBI in the Adani-Hindenburg case. Rejecting the demand for a court-monitored investigation or one by the CBI, the Supreme Court said the market regulator was carrying out a “comprehensive investigation” into the allegations and that a Sebi probe into the matter “inspires confidence”. Welcoming the SC order in January, Gautam Adani had said: “Truth has prevailed…our humble contribution to India’s growth story will continue.”
In January 2024, the Supreme Court had also said it “does not need to intervene in the current regulations governing offshore investors of Indian companies”.
Earlier that month i.e., July 2024, Hindenburg Research said it had received a ‘show cause notice’ from Sebi for trading in shares of Adani Enterprises Ltd (AEL) immediately prior and post the release of its report on the Adani Group in January 2023.
“In our original report, we identified, among other funds, two Mauritius entities called EM Resurgent Fund and Emerging India Focus Funds. Both entities were disclosed as related parties of India Infoline (now called 360 One) and overseen by its employees, as per its annual reports,” Hindenburg alleged.
“We noted that the “the trading patterns [of these funds] suggest that the stock parking entities and the suspicious offshore entities may have artificially inflated the volume and/or price of some Adani listed companies,” it alleged.
“Our concerns were further corroborated by an investigation by the Financial Times, which found a ‘secret paper trail’ at EM Resurgent and Emerging India Focus Funds. The investigation raised questions whether Adani used business associates as ‘front men’ to ‘bypass rules for Indian companies that prevent share price manipulation’,” Hindenburg alleged.
To date, SEBI has taken no action against these funds, it claimed.
“If SEBI really wanted to find the offshore fund holders, perhaps the SEBI Chairperson could have started by looking in the mirror,” Hindenburg alleged. In response to requests from the Indian Supreme Court to investigate the Adani matter, SEBI is said to have hit a wall unveiling the holders of the offshore funds. The Supreme Court said that while SEBI seemingly agreed with its concerns over who funded Adani’s offshore shareholders, “it is evident that SEBI has drawn a blank in this investigation”, the firm alleged.
From April 2017 to March 2022, while Madhabi Buch was a Wholetime Member and Chairperson at SEBI, she had a 100% interest in an offshore Singaporean consulting firm, called Agora Partners, the US firm alleged. On March 16, 2022, two weeks after her appointment as SEBI Chairperson, she quietly transferred the shares to her husband, Hindenburg alleged.
Adani Group chairman Gautam Adani (left) and SEBI chairperson Madhabi Puri Buch (right). 
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