Hindenburg’s new report alleges Sebi chief, husband owned stakes in offshore firms linked to Adanis

In a blog published on Saturday night, Hindenburg Research alleged that the market regulator was unwilling to act on its January 2023 Adani report because Sebi chairperson Madhabi Puri Buch and her husband Dhaval Buch had investments in offshore funds that had links with the Adani group.

The Sebi chief and her husband denied the allegations, terming them ‘baseless’ and an attempted ‘character assassination’.

Hindenburg’s latest salvo comes 18 months after it accused billionaire Gautam Adani of ‘pulling the largest con in corporate history’. The Adani group vehemently denied all the allegations.

In its blog post on Saturday, Hindenburg alleged that Madhabi Puri Buch and Dhaval Buch had invested in IPE Plus Fund 1, a Mauritius-registered fund, and Global Dynamic Opportunities Fund, a Bermuda-based fund. 

It added that a company controlled by Vinod Adani had invested in the Global Dynamic Opportunities Fund which then invested in IPE Plus Fund 1, a fund whose founder and chief investment officer was Anil Ahuja, who had served as a director of Adani Enterprises. Vinod is the elder brother of Gautam Adani.

“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,” wrote Hindenburg.

The short seller made these claims citing documents received from a whistleblower including a funds declaration statement for IPE Plus Fund 1, signed by a principal at IIFL, which manages these schemes. The statement said that the source of the investment is “salary” and the couple´s net worth was estimated at $10 million, back in 2015.

In a statement, Madhabi Puri Buch and Dhaval Buch said, "In the context of allegations made in the Hindenburg Report dated 10 August 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," they added. 

The Adani Group did not immediately respond to Mint's queries.

Another document cited by Hindenburg was a purported email from Dhaval Buch, Madhabi’s husband to Mauritius fund administrator Trident Trust on 22 March 2017, just weeks before she took charge as a Whole Time Member at Sebi. In that email, Dhaval requested to “be the sole person authorised to operate the Accounts” of their holdings in the Global Dynamic Opportunities Fund.

It also cited a purported email sent by during Buch on 25 February 2018 when she wrote to India Infoline using her private Gmail account, doing business through her husband’s name, to redeem the units in the fund.

The report also claimed that in 2019 Buch’s husband 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.

Blackstone-backed Mindspace and Nexus Select Trust, the country's second and fourth largest REITs, were given the green light to go public in August 2020 and May 2023, respectively. 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,”

Blackstone did not immediately respond to a request for comment.

"This latest note appears to be a more follow-up on their (Hindenburg’s) work on Adani," said a Delhi-based executive at an alternate financial investment firm. "It is to suggest that look our work on Adani Group was correct and the regulator did not do its job. Now the question is if this revelation would make India most uninvestable for foreign investors. Call me a cynic but I think markets will shrug this off"

Hindenburg’s  January 2023 report had led to a significant drop in Adani Group stock prices  causing losses of over $100 billion. However, the shares have since clawed their way back up, and now the group commands a market capitalization above its pre-Hindenburg peak.

(Varun Sood contributed to this story)