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Informist, Monday, Aug 12, 2024

AHMEDABAD – Hindenburg Research has termed the reply by Securities and Exchange Board of India chief Madhabi Puri Buch, and her husband, to the US-based short-seller's earlier allegations as one that "includes several important admissions and raises numerous critical questions." The research firm said this in a post on X on late Sunday following a detailed statement by Madhabi Puri Buch and her husband Dhaval on Saturday night. 

These developments come against the backdrop of the latest report by Hindenburg Research which alleged that the SEBI chief and her husband had stakes in Bermuda and Mauritius-based offshore funds that were allegedly used by Gautam Adani's elder brother Vinod Adani to invest in Indian stocks, including Adani Group companies. This, the research firm said, raised the prospect of conflict of interest in SEBI's investigation of Hindenburg's allegations against the Adani Group in its report of January 2023.

In the joint statement, the Buchs denied Hindenburg Research's allegations and said they were not true. Buch said that all disclosures were furnished to SEBI over the years.

They said the investments mentioned in the Hindenburg report were made in 2015, well before Buch was appointed as a whole-time director of SEBI in 2017 and took over as chairperson of SEBI in March 2022. They said these investments were made in their capacity as "private citizens" living in Singapore and that the funds had become dormant on her appointment to SEBI.

Hindenburg, in its latest report, termed this a "massive conflict of interest" as SEBI was tasked with investigating investment funds related to the Adani matter and this could include funds Buch was personally invested in and funds by the same sponsor which were highlighted in short-seller's report of January 2023. The short-seller also said the statement "publicly confirms" her investment in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani.

The Buchs also said that their investment in the two funds was on the advice of Anil Ahuja, a childhood friend of Dhaval. Hindeburg identifies Ahuja as founder and chief investment officer of the Mauritius-based IPE Plus Fund, which the Adani Group has identified as a nominee of 3i Investment Fund in Adani Power during 2007-08 and as director of Adani Enterprises for nine years till June 2017.

Hindenburg also questions the statement by the SEBI chief that the two of the consulting companies she had set up--Agora Advisory Ltd (India) and Agora Partners Singapore--had become dormant on her appointment to SEBI in 2017, with her husband taking over in 2019.

In its report on Saturday, Hindenburg Research alleged that from April 2017 to March 2022, when Buch was whole-time member and chairperson at SEBI, she had 100% stake in a Singapore-based consulting firm called Agora Partners. As per information on SEBI's website, Buch was a whole-time member from Apr 5, 2017 to Oct 4, 2021, and she joined the market regulator as its chairperson on Mar 2, 2022.

The short-seller in its statement on Sunday night again pointed to shareholding list of Agora Advisory Ltd (India) and stated that as on Mar 31, 99% of it was still owned by Madhabi Buch and not her husband. It went on to add that this entity is "currently active and generating consulting revenue". Quoting financial statements, Hindenburg said that the Indian consulting firm had earned a revenue of 23.99 mln rupees during the financial years 2021-22, 2022-23 and 2023-24, while she was serving as chairperson.

As for Agora Partners Singapore, Hindenburg refers to Singaporean records to claim that Buch remained 100% shareholder of this entity till Mar 16, 2022, and transferred her shares to her husband's name two weeks after her appointment as SEBI chairperson.

Today, shares of Adani group companies opened in the red. At 1037 IST, shares of Adani Enterprises were 2.5% lower at 3,107.10 rupees, while those of Adani Ports and Special Economic Zone were down 1.8% at 1,505 rupees, on the National Stock Exchange. Shares of Adani Power were 3% lower at 674.55 rupees on NSE.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Sunil Raghu

Edited by Aditya Sakorkar

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