Hindenburg case: AMFI backs SEBI chief, says India's financial system secure, transparent

Mutual fund industry, represented by Association of Mutual Funds in India (AMFI), has refuted the allegations made by U.S. short seller  Hindenburg Research and came out in support of SEBI chairperson Madhabi Puri Buch, saying that it is an attempt to undermine her contribution to the Indian capital market.

“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,” AMFI says in a statement.

“Left unchecked, it can create unnecessary hurdles in the path of the world’s fastest-growing economy. These statements, lacking in context and understanding of our regulatory environment, seek to malign the hard-earned achievements of our nation. Such advances must be viewed as creating a hurdle in India's endeavour to become a developed economy,” the statement read.

The MF industry representative assured investors and partners, both domestic and international, that India's financial system is “secure”, “transparent”, and designed to foster growth and innovation with high integrity driven right from the top of the institution.

“India's future is bright, and our market structure is strong. We encourage our stakeholders to remain confident and continue to be part of this extraordinary growth story,” AMFI says.

As per AMFI, the robust performance of our markets and the strength of our financial sector reflect a well-regulated environment that prioritises investor protection and adherence to global best practices. The regulatory framework aligns with global best practices & standards and also ensures the protection and confidence of the smallest of investors. “The success of our markets, coupled with the evolved understanding and participation of our investors, underscores the credibility and effectiveness of this system.”

“Over a period, the regulator has created a well-functioning market trusted by both local and global investors with several measures taken under the current leadership of SEBI Chairperson,” it says.

The mutual industry body issued the statement after Hindenburg in a fresh report alleged that SEBI chairperson and her husband Dhaval Buch have stakes in "obscure offshore funds used in the Adani money siphoning scandal". "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," says Hindenburg in its report titled "Whistleblower Documents Reveal SEBI’s Chairperson Had Stake In Obscure Offshore Entities Used In Adani Money Siphoning Scandal".

Responding to Hindenburg's latest allegations, SEBI Chairperson and her husband Dhaval Buch in a joint statement clarified that the allegations levelled against them by the U.S. short-seller are an attempt to 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,” Puri and her husband say in a joint statement.

Gautam Adani-led Adani Group also rejected the allegation, terming them as “malicious, “mischievous” and “manipulative”. The conglomerate says, “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.”

Meanwhile, opposition parties, including the Congress, have asked the central government to act immediately to eliminate all conflicts of interest in the SEBI investigation of Adani Group. Leader of Opposition in Lok Sabha and Congress leader Rahul Gandhi has targeted PM Narendra Modi, Adani Group chairman Gautam Adani, asking why SEBI Chairperson hasn't resigned yet.