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PremiumHindenburg-Adani Case Highlights: Capital markets regulator Securities and Exchange Board of India (SEBI) refuted Hindenburg's claims of Chairperson Madhabi Puri Buch's involvement in implementing a raft of legislation on real estate investment trusts or REITs to benefit Blackstone, one of the largest Reits sponsors to India.
SEBI said that claims of such regulations or changes in regulations or circulars issued related to Reits “are inappropriate." The markets regulator also highlighted that SEBI Chairperson Buch had made relevant disclosures from time to time about the holdings of the securities and their transfers. “Chairperson has also recused herself in matters involving potential conflicts of interest," said SEBI in the statement released on Sunday, August 11.
SEBI asked investors to remain calm and exercise due diligence before reacting to reports amid Hindenburg allegations.
US-based short seller Hindenburg Research has alleged that SEBI chairperson Madhabi Puri Buch had a stake in obscure offshore entities used in Adani's ‘money siphoning scandal’ in its new investigative report. Stay tuned to LiveMint for the latest updates on Hindenburg Research's new investigative report
Hindenburg-Adani Case Live: The capital markets regulator said it had completed 23 out of 24 investigations, adding that it has issued over 100 summons and 1,100 letters and emails to the Adani Group. Refuting the allegations of inaction made by Hindenburg Research in its latest blog on 10 August, Sebi said it had issued communications to domestic and foreign regulators, and examined over 12,000 pages of documents.
On Sunday, Sebi also refuted Hindenburg’s claim that since Buch was appointed the chairperson in March 2022, Sebi proposed and implemented a raft of legislation on real estate investment trusts, or Reits. These it claimed, were of “significant benefit to Blackstone as one of the largest Reit sponsors in India, whom her husband works for."
According to Sebi, claims that such regulations, changes to regulations or circulars issued related to Reits were to favour one large multinational financial conglomerate, are inappropriate.
Hindenburg-Adani Case Live: In a post on X, Rahul Gandhi said that the integrity of SEBI, the securities regulator entrusted with safeguarding the wealth of small retail investors, has been gravely compromised by the allegations against its Chairperson.
Stating that honest investors across the country have pressing questions for the government, Rahul Gandhi asked, “Why hasn’t SEBI Chairperson Madhabi Puri Buch resigned yet? If investors lose their hard-earned money, who will be held accountable—PM Modi, the SEBI Chairperson, or Gautam Adani? In light of the new and very serious allegations that have surfaced, will the Supreme Court look into this matter suo moto once again?."
Hindenburg-Adani Case Live: “Chairperson has also recused herself in matters involving potential conflicts of interest," said SEBI in the official statement. “It is noted that relevant disclosures required in terms of holdings of securities and their transfers have been made by the Chairperson from time to time," they said. Read More
Hindenburg-Adani Case Live: Both Madhabi Buch and Dhaval Buch in a joint statement strongly denied the allegations, stating that they have made all necessary disclosures. “Our life and finances are an open book. All disclosures as required have already been furnished to Sebi over the years," they said.
Madhabi Buch owns 99% of the stake in Mumbai-based Agora Advisory Pvt. Ltd, regulatory filings show, although she stepped down as a director before she was appointed as a whole time member of Sebi in April 2017. Link
Hindenburg-Adani Case Live: “Recent external comments on the Regulator Chairperson not only attempt to undermine the Chairperson Mrs Madhabi Buch’s contribution to the Indian capital market, but it also undermines our country’s economic progress and creating a trust deficit in the market ecosystem must be seen for what they truly are - attempts to create sensation by connecting random events done in the past," said the Association of Mutual Funds in India in a statement on Sunday, August 11.
Hindenburg-Adani Case Live: The fund’s operations were conducted in full compliance with regulatory standards, and its investment strategy was governed solely by the fund manager. "Both Mrs. Madhabi Buch and Mr. Dhaval Buch, whose collective stake in the fund was under 1.5% of the total inflow, had no influence over the fund’s investment decisions," the company said in its press release.
Hindenburg-Adani Case Live: “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. 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, JP Morgan and 3i Group plc, had many decades of strong investing career. 1. As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company…," the statement reads.
Hindenburg-Adani Case Live: “This recent Hinderburg report has revealed that SEBI chief Madhabi Buch and her husband Dhaval Buch were investing in the same Bermuda and Mauritius-based offshore funds which was related to Gautam Adani’s brother Vinod Adani. This means that the police who was responsible for the investigation is herself involved in this"
Hindenburg-Adani Case Live: "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," it said.
Hindenburg-Adani Case Live: On Sunday, the Adani Group strongly criticized American short-seller Hindenburg for alleging financial ties between the conglomerate and SEBI Chairperson Madhabi Buch and her husband. The group labeled these claims as malicious, mischievous, and manipulative, accusing Hindenburg of reaching pre-determined conclusions for personal gain.
BJP leader Sudhanshu Trivedi has accused the Opposition of conspiring to destabilize India by aligning with Hindenburg Research, whose recent report has sparked controversy. "A report came from Hindenburg, which has been on the radar of Indian investigating agencies. The Opposition is speaking in tandem with them, they have also raised this in the Parliament session," Trivedi stated.
He further questioned the timing of the report's release, suggesting a coordinated effort to create unrest. "I want to ask why these foreign reports come at the time of the Parliament session? I want to allege that Congress leaders knew that the report was coming. It is clear that the Opposition wants to create imbalance in India," Trivedi added.
Hindenburg-Adani Case Live: On Hindenburg report with allegations on SEBI Chief and her husband, BJP leader and former Union Minister Rajeev Chandrasekhar told ANI, “...These are a set of innuendos and guesswork that are being tied together with a few grains of truth...There is a certain plan behind this...India's financial system today is the strongest in the world...Indian banks are strong. Indian financial sector has been rebuilt over the last ten years by PM Modi...There seems to be a pattern where the Congress over the last ten years has adopted a strategy of politics of lies and is now seeking foreign help to destabilize our financial system and to create chaos in the country by attacking the independent regulator SEBI and by casting aspersions on the chairman of SEBI...Nothing in the report is credible…"
Hindenburg-Adani Case Live: Adani Group has clarified that it had no commercial relationship with the individuals mentioned in the latest report by Hindenburg Research and the group was committed to transparency and compliance.
“It is reiterated that our overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents. Furthermore, Anil Ahuja was a nominee director of 3i investment fund in Adani Power (2007-2008) and, later, a director of Adani Enterprises until 2017.
The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing. We remain steadfastly committed to transparency and compliance with all legal and regulatory requirements," said Adani Group.
Hindenburg-Adani Case Live: Adani Group rejected the latest allegations from Hindenburg saying they were already dismissed by the Supreme Court of India in January 2024.
“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," the Gautam Adani-led ports-to-power conglomerate said in a statement filed with stock exchanges.
Adani Group has dismissed the latest allegations from Hindenburg Research, terming them as “malicious", “mischievous," and “manipulative". Here’s the statement from the Adani Group:
"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.
It is reiterated that our overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents. Furthermore, Anil Ahuja was a nominee director of 3i investment fund in Adani Power (2007-2008) and, later, a director of Adani Enterprises until 2017.
The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing. We remain 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," Adani Group said.
Hindenburg-Adani Case Live: Congress leader Pawan Khera told ANI, "...Government of India had paid no attention towards any special investigation. Hindenburg came out with another report and all the doings of SEBI Chief Madhabi Buch and her husband Dhaval Buch is before everyone now. Their investments in offshore companies are before everyone. These are those companies in which Gautam Adani's brother Vinod Adani has also made investments. The question is when Madhabi Buch was appointed as the SEBI Chairman, did the Government of India not know about this? If they did not know, then it was a major failure. If they knew about it, then the PM of India himself is a part of this conspiracy...We are not asking anything from SEBI Chief or Gautam Adani, we ask the Prime Minister of the country - did your government, which considers itself very alert, not know about it? Nothing will be found through anything less than Joint Parliamentary Committee (JPC). There should be JPC and only through that all answers will come out."
Hindenburg-Adani Case Live: Congress MP Manish Tewari told ANI, “There are certain revelations by the Hindenburg Research which have been put out in the public space. They require closer scrutiny...There seems to be some semblance of an alleged conflict of interest and so therefore under those circumstances there has been a demand in the public space for a while that the entire Hindenburg saga needs to be investigated properly by a joint parliamentary committee. It would be in the fitness of things if a joint parliamentary committee is constituted to go into all these issues at length as they do require a quietus and a quietus will only come once a joint parliamentary committee has looked at them…"
Hindenburg-Adani Case Live: On Hindenburg report with allegations on SEBI Chief and her husband, Congress MP Shashi Tharoor says, “These are serious matters. I am not aware of the details...Any such allegations must be answered satisfactorily or investigated. Can't leave these things hanging up there and casting a cloud on the integrity of our system. It is important that either a satisfactory explanation is given by the people accused or there should be an investigation," ANI reported.
Hindenburg-Adani Case Live: X (Formerly known as Twitter) saw a flurry of reactions on Sunday following explosive allegations from Hindenburg Research against SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch. The research firm, known for its critical reports, accused the couple of having investments in offshore funds with ties to the Adani Group, raising questions about SEBI's impartiality. Read here
Hindenburg-Adani Case Live: Dhaval Buch's LinkedIn profile mentions he is a Senior Advisor at Blackstone and Alvarez & Marsal. Buch has been working with Blackstone since July 2019. “Blackstone has been one of the largest investors and sponsors of REITS, a Nascent Asset class in India", Hindenburg report says. Dhaval Buch has worked with Bristlecone and Hindustan Unilever before working with Blackstone. Read full report here
Hindenburg-Adani Case Live: Former Infosys CFO Mohandas Pai has termed the latest allegations by Hindenburg Research against Sebi Chairperson Madhabi Puri Buch as “Character assassination by a Vulture Fund".
Replying to a post on X, Pai said, “Character assassination by a Vulture Fund. Rubbish allegations aimed at sensationalism. There was a SC monitored investigation overseen by an Eminent panel- when the vulture fund was fully exposed it throws mud."
Defending Sebi’s regulations on REITs, Pai said, “All regulations of SEBI are made after open consultations. The regulations demonstrate collective thinking of market and regulators based on global benchmarks.
Hindenburg-Adani Case Live: Deepak Shenoy, CEO of Capitalmind believes the latest allegations against Sebi chief Madhabi Puri Buch levied by US-based short seller Hindenburg Research have ‘hardly any substance’. Replying to a post on social media platform X, Shenoy said, “Thoda zyada ho gaya, i feel, basically they have gone into sensationalism. There is hardly any substance."
Hindenburg-Adani Case Live: Hindenburg report claimed that in 2019 Sebi Chairperson Madhabi Puri Buch’s husband Dhaval Buch was appointed as advisor to Blackstone, a global private equity firm which has been one of the largest investors in real estate investment trusts, or REITs.
The Hindenburg blog cited a raft of REIT legislation passed by Sebi during Dhaval Buch’s time as advisor to saying that it was “of significant benefit to Blackstone,"
“During Dhaval Buch’s Time As Advisor To Blackstone, SEBI Has Proposed, Approved And Facilitated Major REIT Regulations Changes. These Include 7 Consultation Papers, 3 Consolidated Updates, 2 New Regulatory Frameworks And Nomination Rights For Units, Specifically Benefiting Private Equity Firms Like Blackstone," Hindenburg report said.
Blackstone did not immediately respond to a request for comment.
Hindenburg-Adani Case Live: Congress general secretary Jairam Ramesh, in an official statement, said the government must act immediately to eliminate all conflicts of interest in the SEBI investigation of Adani.
“SEBI’s strange reluctance to investigate the Adani MegaScam has been long noted, not least by the Supreme Court’s Expert Committee. That Committee had pointed out in its report that SEBI had in 2018 diluted and in 2019, entirely deleted the reporting requirements relating to the ultimate beneficial (i.e. actual) ownership of foreign funds. This had tied its hands to the extent that “the securities market regulator suspects wrongdoing, but also finds compliance with various stipulations in attendant regulations… It is this dichotomy that has led to SEBI drawing a blank worldwide," according to the Expert Committee.
Under public pressure, after the Adani horse had bolted, SEBI’s board reintroduced stricter reporting rules on 28 June 2023. It told the Expert Committee on 25 August 2023 that it was investigating 13 suspicious transactions. Yet the investigations never bore fruit.
The Hindenburg Research revelations today show that SEBI Chairperson Madhabi Puri Buch and her husband invested in the same Bermuda and Mauritius-based offshore funds in which Vinod Adani and his close associates Chang Chung-Ling and Nasser Ali Shahban Ahli invested funds earned from the over-invoicing of power equipment. These funds are believed also to have been used to amass large stakes in Adani Group companies in violation of SEBI regulations. It is shocking that Buch would have a financial stake in these same funds.
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.
The government must act immediately to eliminate all conflicts of interest in the SEBI investigation of Adani. The fact is that the seeming complicity of the highest officials of the land can only be resolved by setting up a JPC to investigate the full scope of the Adani MegaScam."
Hindenburg-Adani Case Live: Commenting on the Hindenburg Research’s latest allegations on Sebi chairperson Madhabi Puri Buch, Trinamool Congress leader Mahua Moitra said, “crony capitalism is at its finest", asking that will the CBI and ED file cases.
In a post on X (formerly Twitter), Moitra wrote, “In true Adani style - even SEBI Chairman is investor in his group. Crony Capitalism at its finest. @CBiHeadquarters & @Dir_ED - will you be filing POCA and PMLA cases or not?" she asked.
Hindenburg-Adani Case Live: Hindenburg Research’s latest allegations against Sebi chairperson Madhabi Puri Buch has garnered political reactions in the country. Congress has asked the Central government to immediately eliminate all conflicts of interest in the regulator's investigation of the Adani Group.
Congress general secretary Jairam Ramesh, in an official statement, said the Sebi's “strange reluctance" to investigate the “Adani mega scam" has been long noted, not least by the Supreme Court's Expert Committee.
“Under public pressure, after the Adani horse had bolted, SEBI's board reintroduced stricter reporting rules on 28 June 2023. It told the Supreme Court's Expert Committee on 25 August 2023 that it was investigating 13 suspicious transactions. Yet the investigations never bore fruit….
…The government must act immediately to eliminate all conflicts of interest in the SEBI investigation of Adani. The fact is that the seeming complicity of the highest officials of the land can only be resolved by setting up a JPC (joint parliamentary committee) to investigate the full scope of the Adani mega scam," he said.
Hindenburg-Adani Case Live: In July 2024, US-based short-seller Hindenburg Research said it received a “show cause" notice from India's securities regulator. Characterizing the Securities and Exchange Board of India's (SEBI) “show cause" notice as attempted intimidation, Hindenburg wrote that the regulator had made the “nebulous allegation" that Hindenburg’s report contained misrepresentations and inaccurate statements meant to mislead readers.
“In our view, SEBI has neglected its responsibility, seemingly doing more to protect those perpetrating fraud than to protect the investors being victimized by it," Hindenburg had said.
Sebi chairperson Madhabi Puri Buch has denied the allegations levied by the US short-selling Hindenburg Research in its latest report, terming them ‘baseless’ and an attempted ‘character assassination’.
“In the context of allegations made in the Hindenburg Report dated August 10, 2024 against us, we would like to state that we strongly deny the baseless allegations and insinuations made in the report. The same are devoid of any truth. Our life and finances are an open book. 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," a press statement by Sebi Chief Madhabi Puri Buch and her husband Dhaval Buch said.
Hindenburg said in its report today, ‘’We suspect SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani.''
‘’To date, Sebi has taken no action against other suspect adani shareholders operated by India infoline: EM resurgent fund and emerging India focus funds. 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, per its annual reports,'' said the US short-seller.
‘’We noted that “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,'' said Hindenburg.
Hindenburg said in its report, ‘’The Supreme Court said that SEBI had “drawn a blank" in its investigations into who funded Adani’s offshore shareholders. If Sebi really wanted to find the offshore fund holders, perhaps the Sebi chairperson could have started by looking in the mirror. We find it unsurprising that Sebi was reluctant to follow a trail that may have led to its own chairperson,'' said Hindenburg.
‘’In response to requests from the Indian Supreme Court to investigate the Adani matter, SEBI was said to have a hit a wall unveiling the holders of the offshore funds. The Supreme Court said that while SEBI seemingly agreed with our concerns over who funded Adani’s offshore shareholders, “it is evident that SEBI has drawn a blank in this investigation,'' added the US short-seller.
Hindenburg said in its report, ‘’In a later account statement dated February 26th, 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 total value of Buch’s stake was worth $872,762.25 at the time.''
‘’Later, on February 25th, 2018, during Buch’s tenure as a Whole-Time Member of SEBI, whistleblower documents show she personally wrote to India Infoline using her private Gmail account, doing business through her husband’s name, to redeem the units in the fund.
In brief, despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry she now is responsible for regulating, documents show SEBI Chairperson Madhabi Buch and her husband had stakes in a multi-layered offshore fund structure with miniscule assets, traversing known high-risk jurisdictions, overseen by a company with reported ties to the Wirecard scandal, in the same entity run by an Adani director and significantly used by Vinod Adani in the alleged Adani cash siphoning scandal,'' added the US short-seller.
Hindenburg said in its report, ‘’Madhabi Buch and her husband Dhaval Buch first appear to have opened their account with IPE Plus Fund 1 on June 5th, 2015 in Singapore, per whistleblower documents.
A declaration of funds, signed by a principal at IIFL states that the source of the investment is “salary" and the couple´s net worth is estimated at $10 million. Madhabi Buch was appointed a “Whole Time Member" of SEBI in April 2017, according to her LinkedIn profile.''
‘’On March 22nd, 2017, just weeks ahead of that appointment, Madhabi’s husband, Dhaval Buch, wrote to Mauritius fund administrator Trident Trust, according to documents we received from a whistleblower. The email was regarding his and his wife’s investment in the Global Dynamic Opportunities Fund .
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,'' said Hindenburg in its report.
Hindenburg added in its report ‘’Sitting below GDOF in the multi-layer structure (two layers below the Global Opportunities Fund), is the IPE Plus fund, a small and obscure offshore fund registered in Mauritius. The IPE Plus Fund had only U.S. $38.43 million in assets under management (AUM) at the end of December 2017, per IIFL disclosures.''
‘’AdaniWatch reported that “by March 2017, ATIL, a Vinod Adani company, had a total balance of $40.38 million with GDOF". Thus, while we are unable to see the total assets of parent fund GDOF, it appears a significant portion of the assets of the funds may be comprised of Adani money.
Beyond being used as an alleged funnel for Vinod Adani’s money, the tiny fund had other close ties to Adani. The Founder and Chief Investment Officer (CIO) of the IPE Plus Fund was Anil Ahuja, per his biography. At the same time, Ahuja was a director of Adani Enterprises where he served three terms spanning nine years ending in June 2017, per his biography and exchange disclosures. Prior to that he was a director of Adani Power,'' said Hindenburg in its report.
Hindenburg said in its report today, ‘’A separate investigation by the Financial Times showed that the parent fund of GDOF – the Bermuda-based Global Opportunities Fund (“GOF") – was used by two Adani associates “to amass and trade large positions in shares of the Adani Group".
These nested funds are managed by Indian Infoline (“IIFL"), now called 360 One per private fund data and IIFL’s marketing material.
IIFL, is a publicly listed wealth management firm in India which has a long history in setting up convoluted fund structures and with previous ties to the Wirecard scandal, Germany’s largest ever fraud case. IIFL Wealth was alleged to have committed fraud in a takeover deal involving Wirecard, using a Mauritius fund structure, per a lawsuit in UK courts.''
Hindenbrug Research has accused SEBI chairperson and her husband Dhaval Buch in its report. Dhaval Buch's LinkedIn profile mentions he is a Senior Advisor at Blackstone and Alvarez & Marsal. Buch has been working with Blackstone since July 2019. “Blackstone has been one of the largest investors and sponsors of REITS, a Nascent Asset class in India", HIndenburg report says.
‘’As detailed in our original Adani report, documents from the Directorate of Revenue Intelligence (DRI) alleged that Adani “grossly" overvalued the import valuation of key power equipment, using offshore shell entities to siphon and launder money from the Indian public,'' said Hindenburg in its report.
‘’A subsequent investigation by non-profit project Adani Watch in December 2023 showed how a web of offshore entities, controlled by Gautam Adani’s brother, Vinod Adani, were recipients of funds from the alleged over-invoicing of power equipment.
In one complex structure, a Vinod Adani controlled company had invested in “Global Dynamic Opportunities Fund" in Bermuda, a British overseas territory and tax haven, which then invested in IPE Plus Fund 1, a fund registered in Mauritius, another tax haven,'' said Hindenburg
“IPE plus fund" is a small offshore auritius fund set up by an Adani director through India Infoline (IIFL), a wealth management firm with ties to the wirecard scandal,''said Hindenburg.
‘’Vinod Adani – brother of Gautam Adani – used this structure to invest in indian markets with funds allegedly siphoned from over invoicing of power equipment to the Adani group,'' added the US short-seller.
‘’The Indian Supreme Court said that SEBI had drawn a blank in its investigation of these shareholders, as detailed in the court records. In late June 2024, Adani CFO Jugeshinder Singh described some regulator notices aimed towards Adani Group as “trivial", apparently writing off the prospect of their severity even before the process was concluded,'' said Hindenburg in its report today.
Hindenburg claims in its report, ‘’Instead, on June 27th, 2024, SEBI sent us an apparent ‘show cause’ notice. SEBI did not allege any factual errors in our 106-page analysis, but instead claimed the disclosure around our short position– which we disclosed repeatedly– was deficient, arguing that we should have provided even more robust disclosure.
The SEBI notice also claimed our report was “reckless" for quoting a banned broker with specific experience dealing with SEBI who detailed how the regulator was fully aware that firms like Adani used complex offshore entities to flout rules, and that the regulator participated in the schemes.
In our July 2024 response to the ‘show cause’ notice, we wrote that we found it odd how SEBI—a regulator specifically set up to prevent fraudulent practices – showed little interest in meaningfully pursuing the parties that ran a secret offshore shell empire engaging in billions of dollars of undisclosed related party transactions through public companies while propping up its stocks through a network of sham investment entities.''
In its report, Hindenburg said, ‘’It has been nearly 18 months since our original report on the Adani Group presented overwhelming evidence that the Indian conglomerate was operating “the largest con in corporate history". Our report exposed a web of offshore, primarily Mauritius-based shell entities used for suspected billions of dollars of undisclosed related party transactions, undisclosed investment and stock manipulation.''
‘’Since then, despite the evidence, along with over 40 independent media investigations corroborating and expanding on our original work, Indian securities regulator SEBI has taken no public action against the Adani Group. Media has reported that SEBI is likely to impose mere token, technical violations on the Adani Group despite the breadth and magnitude of the issues,'' added Hindenburg in its report.
Hindenburg-Adani case LIVE updates: The Hindenburg report published on 10 August claimed that SEBI Chairperson Madhabi Puri Buch and her husband had stakes in both obscure offshore funds used in the 'Adani money siphoning scandal'
“The current SEBI Chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani." the Hindenburg report reads
