Hindenburg-Adani Case Highlights: Investors should remain calm and exercise due diligence, says SEBI

Hindenburg-Adani Case Live: The capital markets regulator said it had completed 23 out of 24 investigations, adding that it has issued over 100 summons and 1,100 letters and emails to the Adani Group. Refuting the allegations of inaction made by Hindenburg Research in its latest blog on 10 August, Sebi said it had issued communications to domestic and foreign regulators, and examined over 12,000 pages of documents. 

On Sunday, Sebi also refuted Hindenburg’s claim that since Buch was appointed the chairperson in March 2022, Sebi proposed and implemented a raft of legislation on real estate investment trusts, or Reits. These it claimed, were of “significant benefit to Blackstone as one of the largest Reit sponsors in India, whom her husband works for.”

According to Sebi, claims that such regulations, changes to regulations or circulars issued related to Reits were to favour one large multinational financial conglomerate, are inappropriate.

Hindenburg-Adani Case Live: In a post on X, Rahul Gandhi said that the integrity of SEBI, the securities regulator entrusted with safeguarding the wealth of small retail investors, has been gravely compromised by the allegations against its Chairperson. 

Stating that honest investors across the country have pressing questions for the government, Rahul Gandhi asked, “Why hasn’t SEBI Chairperson Madhabi Puri Buch resigned yet? If investors lose their hard-earned money, who will be held accountable—PM Modi, the SEBI Chairperson, or Gautam Adani? In light of the new and very serious allegations that have surfaced, will the Supreme Court look into this matter suo moto once again?.” 

Hindenburg-Adani Case Live: “Chairperson has also recused herself in matters involving potential conflicts of interest,” said SEBI in the official statement. “It is noted that relevant disclosures required in terms of holdings of securities and their transfers have been made by the Chairperson from time to time,” they said. Read More

Hindenburg-Adani Case Live: Both Madhabi Buch and Dhaval Buch in a joint statement strongly denied the allegations, stating that they have made all necessary disclosures. “Our life and finances are an open book. All disclosures as required have already been furnished to Sebi over the years," they said. 

Madhabi Buch owns 99% of the stake in Mumbai-based Agora Advisory Pvt. Ltd, regulatory filings show, although she stepped down as a director before she was appointed as a whole time member of Sebi in April 2017. Link

Hindenburg-Adani Case Live: “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,” said the Association of Mutual Funds in India in a statement on Sunday, August 11. 

Hindenburg-Adani Case Live: The fund’s operations were conducted in full compliance with regulatory standards, and its investment strategy was governed solely by the fund manager. "Both Mrs. Madhabi Buch and Mr. Dhaval Buch, whose collective stake in the fund was under 1.5% of the total inflow, had no influence over the fund’s investment decisions," the company said in its press release.

Hindenburg-Adani Case Live: “The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member. The decision to invest in this fund was because the Chief Investment Officer, Anil Ahuja, is Dhaval’s childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, JP Morgan and 3i Group plc, had many decades of strong investing career. 1. As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company…,” the statement reads.

Hindenburg-Adani Case Live: “This recent Hinderburg report has revealed that SEBI chief Madhabi Buch and her husband Dhaval Buch were investing in the same Bermuda and Mauritius-based offshore funds which was related to Gautam Adani’s brother Vinod Adani. This means that the police who was responsible for the investigation is herself involved in this”

Hindenburg-Adani Case Live: "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. We completely reject these allegations against the Adani Group which are a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Hon'ble Supreme Court in January 2024," it said.

Hindenburg-Adani Case Live: On Sunday, the Adani Group strongly criticized American short-seller Hindenburg for alleging financial ties between the conglomerate and SEBI Chairperson Madhabi Buch and her husband. The group labeled these claims as malicious, mischievous, and manipulative, accusing Hindenburg of reaching pre-determined conclusions for personal gain.

BJP leader Sudhanshu Trivedi has accused the Opposition of conspiring to destabilize India by aligning with Hindenburg Research, whose recent report has sparked controversy. "A report came from Hindenburg, which has been on the radar of Indian investigating agencies. The Opposition is speaking in tandem with them, they have also raised this in the Parliament session," Trivedi stated.

He further questioned the timing of the report's release, suggesting a coordinated effort to create unrest. "I want to ask why these foreign reports come at the time of the Parliament session? I want to allege that Congress leaders knew that the report was coming. It is clear that the Opposition wants to create imbalance in India," Trivedi added.

Hindenburg-Adani Case Live: On Hindenburg report with allegations on SEBI Chief and her husband, BJP leader and former Union Minister Rajeev Chandrasekhar told ANI, “...These are a set of innuendos and guesswork that are being tied together with a few grains of truth...There is a certain plan behind this...India's financial system today is the strongest in the world...Indian banks are strong. Indian financial sector has been rebuilt over the last ten years by PM Modi...There seems to be a pattern where the Congress over the last ten years has adopted a strategy of politics of lies and is now seeking foreign help to destabilize our financial system and to create chaos in the country by attacking the independent regulator SEBI and by casting aspersions on the chairman of SEBI...Nothing in the report is credible…”

Hindenburg-Adani Case Live: Adani Group has clarified that it had no commercial relationship with the individuals mentioned in the latest report by Hindenburg Research and the group was committed to transparency and compliance.

“It is reiterated that our overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents. Furthermore, Anil Ahuja was a nominee director of 3i investment fund in Adani Power (2007-2008) and, later, a director of Adani Enterprises until 2017.  

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,” said Adani Group.

Hindenburg-Adani Case Live: Adani Group rejected the latest allegations from Hindenburg saying they were already dismissed by the Supreme Court of India in January 2024.

“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. We completely reject these allegations against the Adani Group which are a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Hon'ble Supreme Court in January 2024,” the Gautam Adani-led ports-to-power conglomerate said in a statement filed with stock exchanges.

Adani Group has dismissed the latest allegations from Hindenburg Research, terming them as “malicious”, “mischievous,” and “manipulative”. Here’s the statement from the Adani Group:

"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. We completely reject these allegations against the Adani Group which are a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Hon'ble Supreme Court in January 2024.

It is reiterated that our overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents. Furthermore, Anil Ahuja was a nominee director of 3i investment fund in Adani Power (2007-2008) and, later, a director of Adani Enterprises until 2017.

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.

For a discredited short-seller under the scanner for several violations of Indian securities laws, Hindenburg's allegations are no more than red herrings thrown by a desperate entity with total contempt for Indian laws," Adani Group said.

Hindenburg-Adani Case Live: Congress leader Pawan Khera told ANI, "...Government of India had paid no attention towards any special investigation. Hindenburg came out with another report and all the doings of SEBI Chief Madhabi Buch and her husband Dhaval Buch is before everyone now. Their investments in offshore companies are before everyone. These are those companies in which Gautam Adani's brother Vinod Adani has also made investments. The question is when Madhabi Buch was appointed as the SEBI Chairman, did the Government of India not know about this? If they did not know, then it was a major failure. If they knew about it, then the PM of India himself is a part of this conspiracy...We are not asking anything from SEBI Chief or Gautam Adani, we ask the Prime Minister of the country - did your government, which considers itself very alert, not know about it? Nothing will be found through anything less than Joint Parliamentary Committee (JPC). There should be JPC and only through that all answers will come out."

Hindenburg-Adani Case Live: Congress MP Manish Tewari told ANI, “There are certain revelations by the Hindenburg Research which have been put out in the public space. They require closer scrutiny...There seems to be some semblance of an alleged conflict of interest and so therefore under those circumstances there has been a demand in the public space for a while that the entire Hindenburg saga needs to be investigated properly by a joint parliamentary committee. It would be in the fitness of things if a joint parliamentary committee is constituted to go into all these issues at length as they do require a quietus and a quietus will only come once a joint parliamentary committee has looked at them…”

Hindenburg-Adani Case Live: On Hindenburg report with allegations on SEBI Chief and her husband, Congress MP Shashi Tharoor says, “These are serious matters. I am not aware of the details...Any such allegations must be answered satisfactorily or investigated. Can't leave these things hanging up there and casting a cloud on the integrity of our system. It is important that either a satisfactory explanation is given by the people accused or there should be an investigation,” ANI reported.

Hindenburg-Adani Case Live: X (Formerly known as Twitter) saw a flurry of reactions on Sunday following explosive allegations from Hindenburg Research against SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch. The research firm, known for its critical reports, accused the couple of having investments in offshore funds with ties to the Adani Group, raising questions about SEBI's impartiality. Read here

Hindenburg-Adani Case Live: Dhaval Buch's LinkedIn profile mentions he is a Senior Advisor at Blackstone and Alvarez & Marsal. Buch has been working with Blackstone since July 2019. “Blackstone has been one of the largest investors and sponsors of REITS, a Nascent Asset class in India”, Hindenburg report says. Dhaval Buch has worked with Bristlecone and Hindustan Unilever before working with Blackstone. Read full report here