Explosive new Hindenburg report links Sebi chief Madhabi Puri Buch to ’offshore funds used in Adani scandal’ | 10 points

US short-seller Hindenburg Research has published another explosive new report linking SEBI chairperson Madhabi Puri Buch to the ‘Adani money siphoning scandal’. The report comes more than a year after the firm published allegations of insider trading and other stock market violations by the Adani Group — claims that have been repeatedly denied by the Gautam Adani-led conglomerate. 

The new report focuses on an offshore Mauritius fund called IPE Plus Fund that was ‘set up by Vinod Adani through India Infoline’. It also cites the Bermuda-based Global Dynamic Opportunities Fund (which then invested in IPE Plus Fund 1). The Dubai-based businessman is the older brother of Chairman Gautam Adani and remains associated with the Group. 

“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 his relationship with the SEBI Chairperson. What we hadn’t realized: 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 report said.

We have reached out to SEBI for a response on the latest report by Hindenburg Research. The story will be updated once we receive response. Details shared in this article are on the basis of the Hindenberg report have have not been independently confirmed by Mint.

Top 10 takeaways from the Hindenburg report:

• Hindenburg Research cited “whistleblower documents” to say that the current Sebi chairperson and her husband had stakes in two ‘obscure offshore funds used in the Adani money siphoning scandal’. 
• Obscure offshore Bermuda and Mauritius funds (allegedly controlled by Vinod Adani) have reportedly been used to round-trip funds and inflate stock price.
• According to the report, the duo had first opened their accounts with IPE Plus Fund 1 at the beginning of June 2015 in Singapore. Dhaval Buch however wrote to the Mauritius fund administrator (Trident Trust) in March 2017 and sought to become the ‘sole person authorised to operate the accounts’. The development came mere weeks ahead of his wife's appointment as a ‘whole time member’ of Sebi. 
• “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.”
• The Hindenburg report suggested that Sebi may have been “unwilling take meaningful action against suspect offshore shareholders in the Adani Group” due to its chairperson's links  to the same funds as Vinod Adani. 
•  April 2017 and March 2022 Madhabi Puri Buch (then a whole time member of Sebi) had reportedly held "a 100% interest in an offshore Singaporean consulting firm called Agora Partners. Her shares were transferred to her husband two weeks after her appointment as the Sebi chief. The offshore Singaporean entity remains exempt from disclosing its financial statements.
• Dhaval Buch became a senior advisor to Blackstone in July 2019 (despite a 'lack of experience' in such matter). The company also sponsored Embassy (the country's first ever REIT) as it obtained Sebi approval and launched an IPO in April 2019 — three months before the induction of Dhaval Buch. During his time as advisor Sebi incidentally “proposed, approved and facilitated major REIT regulations changes”.
• The Hindenburg report noted that the Sebi chief had touted REITs as her “favourite products for the future” and urged investors to look “positively” upon the asset class during industry conferences. 
  “While making those statements, she omitted to mention that Blackstone, who her husband advises, stands to gain significantly from the asset class,” the report adds.
• Madhabi Buch currently has a 99% stake in an Indian consulting business called Agora Advisory, where her husband is a director. This entity reportedly declared a revenue of $261,000 in 2022 — 4.4x her disclosed salary at Sebi.