Indian regulator chairman invests in Adani-linked funds, Hindenburg Research alleges
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The chairman of India’s capital markets regulator held a stake in an offshore fund structure used by Vinod Adani, hampering the agency’s investigation into fraud allegations against the eponymous conglomerate run by his billionaire brother, according to new allegations made by U.S. short-selling firm Hindenburg Research.
Madhabi Buch, head of the Securities and Exchange Board of India, and her husband also have “hidden” holdings in Bermuda and Mauritius entities drawn by brother of Adani Group founder Gautam Adani, Hindenburg Research said in a post late Saturday, citing leaked documents it holds.
In a statement, the couple said they “completely deny the baseless allegations and insinuations made in the report”.
The latest allegations come 18 months after the Hindenburg was first accused Adani’s Infrastructure-Focused Empire of corporate fraud and details of a network of offshore funds that they said were used to evade minimum shareholder listing rules. At the time, it prompted a collapse across the group’s listed companies and wiped out $140 billion in market value.
Sebi is yet to release the findings of its lengthy probe into the Adani Group after the Supreme Court of India ordered it in January. end of investigation within three months. In June, Sebi said Hindenburg had “engaged in unfair trade practices” in betting against the Adani Group and had “deliberately sensationalized and distorted certain facts”.
Hindenburg, mentioned previous report by Financial Times over Adani’s links to offshore instruments, said it suspected the alleged fund holdings of Buch – a former executive at India’s ICICI Securities who has been chairman of Sebi since 2022 – were the reason the regulator was “unwilling to take meaningful action” against Adani’s overseas shareholders.
“We do not think Sebi can be trusted to be an objective arbiter in the Adani matter,” Hindenburg said.
The couple first invested in 2015, two years before Buch joined Sebi, according to Hindenburg. The short seller also questioned Buch’s promotion of real estate investment funds without disclosing her husband Dhaval’s role as an adviser to investment management firm Blackstone, which funded Indian Reits.
“Our lives and finances are an open book,” the couple responded to the allegations. “All required disclosures have been provided to Sebi over the years. We have no hesitation in disclosing any and all financial documents, including those relating to the period when we were private citizens.”
Adani Group called Hindenburg’s latest allegations “malicious, destructive and manipulative,” adding that “our offshore holding structure is fully transparent, with all relevant details routinely disclosed in multiple public documents.” The group said it has “absolutely no commercial relationship with the individuals or matters mentioned in this deliberate and calculated attempt to smear our position.” Blackstone did not immediately respond to a request for comment outside regular business hours.
Hindenburg’s increased scrutiny comes at a difficult time for Adani, which is expanding at home and abroad and is in the process of selling shares for the first time since scrapping a $2.4 billion fundraising last year after an initial attack by short sellers.
Hindenburg’s first report on Adani has also been used by India’s opposition as an attack on Prime Minister Narendra Modi, especially ahead of this year’s elections, which he alleged closeness to the tycoon and alleged favoritismboth downplay and deny.
Jairam Ramesh, spokesman for the opposition Indian National Congress party, said it was “shocking that Buch had financial stakes in these very funds” that were accused of accumulating “large stakes in Adani Group companies in violation of Sebi regulations”.
Ramesh added that this also raises “new questions” about two meetings Buch had with Gautam Adani in 2022 shortly after she was appointed chairwoman of the market regulator.
