Hindenburg Hits Back, Demands SEBI Chief Madhabi Puri Buch to Reveal Details of Consulting Firms

Hindenburg Research fired back at SEBI chief Madhabi Puri Buch after she accused the short-seller of attempting a "character assassination" of the Buchs over the Adani saga.

The short seller, in a series of posts on X, said their response "includes several important admissions and raised numerous new critical questions".

"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 said.

On Saturday, Hindenburg Research alleged that SEBI chairperson Madhabi Puri Buch and her husband held undisclosed investments in obscure offshore funds located in Bermuda and Mauritius. These are reportedly the same entities that Vinod Adani, the older brother of Gautam Adani, allegedly used to round-trip funds and artificially inflate stock prices.

"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," Hindenburg said.

According to the statement by Buch, investment in the two funds was made on advice of Dhaval's childhood friend, Anil Ahuja - the person which Hindenburg on Saturday identified as the founder and chief investment officer (CIO) of the Mauritius-based IPE Plus Fund and who the Adani group also in its the statement on Sunday said was a nominee of 3i Investment Fund in Adani Power (2007-2008) and served as a director of Adani Enterprises for three terms spanning nine years ending in June 2017.

"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 31, 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," Hindenburg said.

Also, she remained a 100 per cent shareholder of Agora Partners Singapore until March 16, 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," it alleged.

Madhabi Puri Buch and her husband Dhaval Buch in a joint statement on Sunday strongly denied the "baseless allegations and insinuations made in the report", saying the charges were "devoid of any truth".

SEBI too defended its chairperson. In a two-page statement, it said Buch had made relevant disclosures from time to time and she "had also recused herself in matters involving potential conflicts of interest."

Adani group too denied any commercial dealings with SEBI head, while wealth management entity 360ONE - formerly called as IIFL Wealth Management - separately said Buch and her husband Dhaval Buch's investment in IPE-Plus Fund 1 was less than 1.5 per cent of the total inflows and that it did not make any investments in Adani Group shares.

Hindenburg said the Singaporean consulting entity she set up doesn't publicly report its financials like revenue or profit and "so it's impossible to see how much money this entity has earned during her time at SEBI."

"The Indian entity, still 99 per cent owned by the SEBI chairperson, has generated Rs 23.985 million in revenue (i.e. consulting) during the financial years ('22, '23, and '24), while she was serving as Chairperson, per its financial statements," it said.

Hindenburg cited whistleblower documents to state that "Buch used her personal email to do business using her husband's name while serving as a Whole Time Member of SEBI."

(With inputs from PTI)