Hindenburg Research has previously accused the Adani Group of financial misconduct in January 2023 labeling it as the biggest con in corporate history. These allegations centered on the group’s debt positions and the manipulation of stock prices through offshore entities.
Hindenburg has extended its accusations to include Madhabi Puri Buch, chairperson of SEBI and her husband, Dhaval Buch. The report alleges that both had stakes in offshore entities linked to the Adani Group’s alleged financial improprieties.
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Over 18 months ago, an investigative report revealed the Adani Group’s network of offshore shell entities based in Mauritius.
These entities were suspected of being involved in billions of dollars of undisclosed related-party transactions, investments and stock manipulation.
Despite the evidence and corroborative reports from over 40 independent media investigations, SEBI has taken no public action against the Adani Group.
SEBI issued a show cause notice to the original investigators on June 27, 2024, questioning the adequacy of their disclosure about their short position.
The notice did not dispute the factual accuracy of the 106-page report but criticized it for quoting a banned broker who alleged SEBI’s awareness and participation in the misuse of offshore entities by firms like Adani.
Whistleblower documents reveal that Madhabi Buch and her husband had stakes in IPE Plus Fund 1, an obscure offshore fund registered in Mauritius.
This fund is a multi-layered structure used by Vinod Adani, brother of Gautam Adani for allegedly siphoning money through over-invoicing of power equipment.
The Buchs opened their account with IPE Plus Fund 1 on June 5, 2015 in Singapore. A declaration by IIFL, the wealth management firm managing these funds, estimated the couple’s net worth at $10 million with the source of the investment listed as salary.
In March 2017, just weeks before Madhabi Buch’s appointment as a Whole-Time Member of SEBI, her husband wrote to the Mauritius fund administrator, Trident Trust, requesting to be the sole operator of the accounts.
In February 2018, during her tenure at SEBI, a fund statement addressed to Madhabi Buch’s private email detailed the fund’s value at $872,762.25, reinforcing the connection between the Buchs and the Adani-linked offshore structure.
Madhabi Buch was the 100% shareholder of Agora Partners Pte Ltd, a consulting firm registered in Singapore in 2013.
She retained this stake until March 16, 2022, just two weeks after her appointment as SEBI Chairperson, when she transferred it to her husband.
Agora Partners, being a Singaporean entity is exempt from disclosing its financial statements.
In July 2019, during Madhabi Buch’s tenure at SEBI and her husband was appointed as a Senior Advisor to Blackstone, a global private equity firm and huge player in India’s nascent Real Estate Investment Trust (REIT) market.
During this period, SEBI proposed and implemented numerous regulations benefiting REITs, an asset class in which Blackstone has been heavily involved.
Madhabi Buch publicly endorsed REITs as her favorite products for the future and urged investors to view the asset class positively.
However she failed to disclose that her husband’s employer, Blackstone, stood to gain from the growing REIT market in India.
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Madhabi Buch is a 99% owner of Agora Advisory Private Limited, an Indian consultancy firm where her husband serves as a director.
In 2022, the firm reported consulting revenue of $261,000, higher than Madhabi Buch’s disclosed salary at SEBI.
The Indian Supreme Court has criticized SEBI for failing to uncover the holders of Adani’s offshore funds.
Congress general secretary Jairam Ramesh has expressed concerns over SEBI’s strange reluctance to probe the Adani MegaScam particularly after the Supreme Court’s Expert Committee highlighted SEBI’s lack of action.
Ramesh addressed the need for a Joint Parliamentary Committee to investigate these serious allegations.
MP Mahua Moitra criticized the situation describing it as crony capitalism at its finest. Moitra called for investigations by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) into the alleged money laundering activities linked to the Adani Group and the Buch family.
Hindenburg’s report accuses SEBI of showing a lack of interest in investigating the Adani Group’s offshore entities despite red flags.
Another major allegation is that during her tenure at SEBI, Madhabi Buch’s husband was appointed as a senior advisor to Blackstone.
Hindenburg claims that while serving as SEBI chairperson, Madhabi Buch facilitated regulatory changes that benefited Blackstone.
The report points out that until March 2022, Madhabi Buch had a 100% interest in Agora Partners, a Singaporean consulting firm, which she transferred to her husband shortly after her appointment as SEBI chairperson.
The report also accuses Madhabi Buch of promoting REITs as a favored investment class during her tenure, while allegedly failing to disclose her husband’s advisory role at Blackstone.
Hindenburg suggests that Buch’s actions were aimed at benefiting Blackstone’s investments rather than acting in the public interest.
Another allegation is that Madhabi Buch owns 99% of Agora Advisory, an Indian consulting firm, which reported higher revenues than her official salary at SEBI. Hindenburg questions the legitimacy of these earnings.
Madhabi Buch issued a strong denial, categorizing the allegations as baseless and devoid of any truth. She addressed that both she and her husband are prepared to disclose any financial documents to the appropriate authorities.
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