Hindenburg-Adani case: ‘JPC probe Vs Congress style innuendo’, who said what as Oppn, BJP spar. 10 points

The fresh allegation by Hindenburg Research against SEBI chairperson Madhabi Buch has triggered a political firestorm yet again. 

The opposition parties, led by the Congress, have called for Buch’s resignation and a probe by the Joint Parliamentary Committee (JPC).  The ruling Bharatiya Janata Party (BJP) has dismissed the charges and, instead, accused the Opposition of using its ‘connections abroad’ to create economic chaos in the country.

The US-based Hindenburg Research had alleged in a report in 2023 that the Adani Group had added to its valuation through stock market manipulation, triggering a political row in the run-up to the 2024 general elections.

In the fresh allegations released on August 10, Hindenburg alleged that SEBI did not act on the ‘scam’ because of its chairperson’s ‘complicity’ in using the exact same funds used by Vinod Adani, brother of Gautam Adani.

'SEBI Chairperson Should Resign'

Adani Group has since denounced the latest allegations from Hindenburg Research, terming them as ‘malicious’, "mischievous," and ‘manipulative’. Sebi chairperson Madhabi Puri Buch also denied the allegations terming it ‘baseless’ and an attempted ‘character assassination’.

On August 11, Leader of Opposition (LoP) in Lok Sabha, Rahul Gandhi asked why hasn’t SEBI Chairperson resigned yet. “It is now abundantly clear why Prime Minister Narendra Modi is so afraid of a JPC probe and what it might reveal,” he said.

The JPC Probe

Congress president Mallikarjun Kharge also demanded a JPC probe on the issue. “SEBI had previously cleared Adani, a close associate of PM Modi, before the Supreme Court following the January 2023 Hindenburg Report revelations. However, new allegations have surfaced regarding a quid-pro-quo involving the SEBI Chief. The small & medium investors belonging to the Middle Class who invest their hard-earned money in the stock market need to be protected, as they believe in SEBI,” Kharge said.

The CPM also demanded a JPC probe the resignation of SEBI chairperson. “Given these serious charges against the head of the regulatory authority, it is necessary that the Chairperson step aside till a proper investigation is conducted,” the CPM said.

The BJP leaders dismissed the allegations levelled by Hindenburg Research. Senior BJP leader and former Union minister Rajeev Chandrasekhar called the allegations as ‘a set of innuendos and guesswork that are being tied together with a few grains of truth.’

'Classic Congress style innuendo'

"I have read this "report" , its no smoking gun - its classic Cong style innuendo & lies glued together wth a few grains of truth - aimed at discrediting regulator and causng chaos & losses in markets for investors - thus slowing down bullish sentiments," Chandrasekhar said in a post on X.

BJP’s Tamil Nadu president K Annamalai, however, called for an investigation into the allegations even as he said that the previous allegations by Hindenburg Research had been found to be ‘baseless.’

“Hindenburg is not a journalist or an NGO but a short selling agent of shares… They release such reports, trigger panic among investors, make preparations to capitalise on that crisis scenario, and they make thousands of crores of profit,” Annamalai said.

SC-Monitored Investigation

The Mamata Banerjee-led Trinamool Congress demanded the suspension of SEBI chairperson Buch and a probe by a JPC. The West Bengal's ruling party also demanded a probe monitored by the Supreme Court into allegations by Hindenburg Research that she and her husband had stakes in offshore funds linked to the Adani group.

“The SEBI chief should be suspended in no time, and lookout notices must be issued to all airports to prevent her and her husband from leaving the country,” senior TMC leader Sukhendu Sekhar Ray said in Kolkata, according to a report by news agency PTI.

Series of Questions

TMC Lok Sabha MP Mahua Moitra asked the SEBI chairperson a set of 13 questions.

“Before stating to the Supreme Court that SEBI ‘had drawn a blank’, did you inform the committee / supreme court that some of the funds that you were tasked to investigate were in fact part of the same entity that you had invested in? Did you recuse yourself from the investigation?” Moitra asked.

What does Hindenburg's new report say?

Hindenburg Research has released an exclusive new report implicating SEBI chairperson Madhabi Puri Buch in the 'Adani money siphoning scandal.' This report follows more than a year after Hindenburg first accused the Adani Group of insider trading and other stock market violations—allegations consistently denied by the conglomerate led by Gautam Adani.

Hindenburg's Previous Report

Last January, Hindenburg Research, known for shorting companies like electric truck maker Nikola Corp and Twitter (now X), accused the Adani Group of orchestrating "the largest con in corporate history." The report claimed that the conglomerate used a complex network of offshore companies in tax havens to inflate revenues and manipulate stock prices while accumulating significant debt.

‘No Additional Inquiry Needed’

Following the earlier Hindenburg report, the Supreme Court of India directed the market regulator SEBI to investigate and formed an expert panel to examine potential regulatory lapses. The panel did not issue any negative findings against Adani, and the Supreme Court concluded that no additional investigations were necessary beyond SEBI's ongoing inquiry.

'Reluctance to investigate Adani scam'

Congress general secretary in-charge communications, Jairam Ramesh said on June 11 SEBI's "reluctance to investigate the Adani scam" has been long noted, not least by the Supreme Court's Expert Committee.

Ramesh said the Committee noted that SEBI diluted the reporting requirements for ultimate beneficial ownership of foreign funds in 2018 and completely removed them in 2019.

‘Modus Operandi More Sinister’

Shiv Sena (UBT) Rajya Sabha MP Priyanka Chaturvedi also hit out at SEBI for not responding to her letter requesting information about the investigation into the Hindenburg allegations. Chaturvedi had sought details on the probe into the Adani Group's financial practices as early as April of the previous year, and she implied that SEBI's silence on the matter was telling.