Hindenburg Research Alleges Conflict of Interest at Sebi
Eighteen months after its report on the Adani Group, US-based short-seller Hindenburg Research has alleged a conflict of interest at the Securities and Exchange Board of India (Sebi). In a report published on its website, Hindenburg claims that Sebi Chairperson Madhabi Puri Buch and her husband Dhaval Buch had hidden stakes in offshore entities used in the alleged Adani money siphoning scandal.
Hindenburg's report details a complex web of offshore entities, primarily based in Mauritius, used for undisclosed related-party transactions, undisclosed investments, and stock manipulation. Despite the evidence presented by Hindenburg and over 40 independent media investigations, Sebi has taken no public action against the Adani Group.
The report further alleges that Madhabi Puri Buch and her husband had hidden stakes in the same offshore funds used by Vinod Adani, brother of Gautam Adani. According to Hindenburg, the Buchs may have first opened their account with IPE Plus Fund 1 in Singapore in 2015. This fund was set up by an Adani director through India Infoline (IIFL), a wealth management firm with ties to the Wirecard embezzlement scandal.
Hindenburg also claims that Dhaval Buch was appointed a senior advisor to Blackstone, an American alternative investment management company, in 2019, during his wife's tenure as a whole-time member at Sebi. Blackstone has been one of the largest investors in and sponsors of real estate investment trusts (Reits) in India.
The report alleges that despite having no prior experience in real estate or capital markets, Dhaval Buch joined Blackstone as a senior advisor in July 2019. During his time at Blackstone, Sebi proposed, approved, and facilitated major Reit regulation changes specifically benefiting private equity firms like Blackstone.
Since Madhabi Buch became Sebi Chairperson in March 2022, the report states, Sebi has implemented a raft of Reit legislation significantly benefiting Blackstone.
In response to the allegations, Madhabi Puri Buch and Dhaval Buch have denied any wrongdoing. They stated that their life and finances are an open book and that all required disclosures have been furnished to Sebi. They further stated that they would be issuing a detailed statement in due course.