Hindenburg on SEBI chair's response: 'Publicly release full list of clients, engagements'

U.S.-based short-seller Hindenburg Research, in a series of responses to SEBI Chairperson Madhabi Puri Buch's statement following its report on Saturday, August 10, 2024, has questioned her investments or business engagements through her husband, while serving in an official capacity. The short seller has raised the "conflict of interest" issue and asked her to "publicly release the full list of consulting clients and details of the engagements".

SEBI chair and her husband have denied all the allegations levelled against them, calling it "character assassination". “We strongly deny the baseless allegations and insinuations made in the report. The same is 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 said jointly. She said they had no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them.

Hindenburg, however, says her responses "publicly confirm" her investments in an obscure Bermuda/Mauritius fund, alongside money allegedly siphoned by Vinod Adani, the older brother of Gautam Adani. "SEBI Chairperson Madhabi Buch’s response to our report includes several important admissions and raises numerous new critical questions. Buch’s response now publicly confirms her investment in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani. She also confirmed the fund was run by a childhood friend of her husband, who at the time was an Adani director," the short seller says.

Alleging "conflict of interest" on her part, Hindenburg says SEBI under Buch was tasked with "investigating" investment funds relating to the Adani matter, which would include those "she was personally invested in" and funds by the same sponsor, which were specifically highlighted in our original report.

On Buch's response on entities set up by her, Hindenburg says: "Buch’s statement also claims that the two consulting companies she set up, including the Indian entity and the opaque Singaporean entity “became immediately dormant on her appointment with SEBI” in 2017, with her husband taking over starting in 2019. Per its latest shareholding list as of March 31st, 2024, Agora Advisory Limited (India), is still 99% owned by Madhabi Buch, not her husband. This entity is currently active and generating consulting revenue."

The short seller says Buch remained a "100% shareholder" of Agora Partners Singapore until March 16, 2022, per Singaporean records, owning it during her entire time as a SEBI Whole Time Member. "She only transferred her shares into her husband’s name 2 weeks after her appointment as SEBI Chairperson."

The Singaporean consulting entity doesn’t publicly report its financials like revenue or profit. The Indian entity, still 99% owned by the SEBI Chairperson, has generated Rs 2.3 crore (U.S. ~$312,000) in revenue (i.e. consulting) in FY22, FY23, and FY24, while she served as chairperson, says the short seller. "This is especially important given whistleblower documents showing that Buch used her personal email to do business using her husband’s name while serving as a Whole Time Member of SEBI," alleges Hindenburg.

Citing whistleblower documents, Hindenburg alleges in 2017, weeks ahead of her appointment as SEBI whole-time member, "she ensured the accounts with ties to Adani be registered solely in the name of Dhaval Buch". "Despite disclaiming control, a private email she sent a year into her SEBI term shows she redeemed stakes in the funds through her husband’s name," Hindenburg's claims suggest citing whistleblower documents.

The Adani group led by billionaire Gautam Adani has also rejected the latest reports by Hindenburg, terming them “malicious, “mischievous” and “manipulative”. “The latest allegations by Hindenburg are malicious, mischievous and manipulative selections of publicly available information to arrive at pre-determined conclusions for personal profiteering with wanton disregard for facts and the law."