Nearly 18 months after Hindenburg Research accused Adani Group of stock manipulation and financial wrongdoing, the US-based short-seller has released a new report that alleges deep rot within Securities and Exchange Board of India (SEBI), the markets regulator.
According to Hindenburg, SEBI chairperson Madhabi Puri Buch and her husband Dhaval Buch used to hold stakes in obscure offshore funds that were used to illegally siphon funds to Adani entities. The new report relies on a series of whistleblower documents to establish a link between the SEBI chief and funds based out of Mauritius and Bermuda.
"We had previously noted Adani’s total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani’s relationship with SEBI Chairperson, Madhabi Buch," the report said.
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The documents released by Hindenburg show that Madhabi Buch's stake in the fund was transferred entirely to her husband Dhaval Buch's name just weeks before her appointment as SEBI chairperson. As of 26 February, 2018, the value of Buch’s stake in Global Dynamic Opportunities Fund was $872,762.25.
According to Hindenburg Research, this fund was well entrenched in a convoluated and highly opaque offshore investment structure used by Vinod Adani to siphon funds to Adani entities in India. Vinod Adani is the brother of Adani Group chairman Gautam Adani.
In January 2023, Hindenburg had released a bombshell report on Gautam Adani's business empire, accusing the group of corporate fraud, stock manipulation and accounting malpractices. After huge furore and a drastic, albeit temporary, fall in Adani entities' market capitalisation, the Supreme Court had agreed to look into an investigation based on Hindenburg's allegations.
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In January this year, it was finalised that market regulator SEBI would be fully in charge of the investigation. However, the regulator has not found any evidences of malpractices so far.
In fact, on 27 June, SEBI had even sent a show cause notice to Hindenburg calling out deficiencies in the short-seller's disclosures. "We find it unsurprising that SEBI was reluctant to follow a trail that may have led to its own chairperson," Hindenburg said in its latest report.
The whistleblower documents featured in the latest report include emails sent by Madhavi Buch from her personal address, a letter by Dhaval Buch to a fund administrator in Mauritius and details of an investment account opened by the couple in Singapore in 2015.
Just one email a week