SEBI Chief’s Response Raises Critical Questions: Hindenburg’s Fresh Attack; Know How Sensex Responds

Mumbai: In the ongoing row over the alleged Adani Group scam, the US short-seller, Hindenburg Research, said SEBI Chairperson Madhabi Buch’s response to its report raised several critical questions. A day before, the firm had accused the Buch-led market regulator of not probing its allegations against the Adani Group as the chief herself had stakes in the conglomerate’s offshore funds.

In a new series of posts on X—formerly known as Twitter, Hindenburg claimed Buch had also confirmed in her response to its allegation that the offshore fund was run by her husband Dhaval Buch’s childhood friend, who was a director in the Adani Group.

“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 firm said.

The research firm claimed that the two consulting companies the SEBI chief had set up, including the Indian entity and the opaque Singaporean entity, “became immediately dormant on her appointment with SEBI” in 2017 as her husband took over. The short-seller alleged that the firm is still owned by her, not her husband. “This entity is currently active and generating consulting revenue,” it added.

“Buch said her husband used the consulting entities starting in 2019 to transact with unnamed ‘prominent clients in the Indian industry’. Do these include clients SEBI is tasked with regulating? Buch’s statement promised a ‘commitment to complete transparency’. Given this, will she publicly release the full list of consulting clients and details of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm and any other entity she or her husband may have an interest in? Finally, will the SEBI Chairperson commit to a full, transparent and public investigation into these issues?” the firm asked.

Earlier, the Buchs responded to the allegations by saying that the allegations are untrue and their life and finances are an ‘open book’.“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,” Madhabi and Dhaval said in a statement.

Sensex starts on backfoot, but turns positive amid the Hindenburg-SEBI row on Monday

Amid the ongoing row between Hindenburg and SEBI chief, the BSE Sensex and NSE Nifty opened on the backfoot on Monday. But, it soon turned positive in the intraday trade.

The BSE Sensex, which had slumped by over 400 points earlier on Monday, was quoting at 79,700 level at the time of filing of this report, up by around 100 points. The Nifty50 was testing 24,400. The recovery was led by JSW Steel, HDFC Bank, Axis Bank, Tata Motors, Kotak Bank, Infosys, and Bharti Airtel.

Adani shares fall by 4%

Among individual shares, Adani Enterprises witnessed a decline by around 4 per cent. Adani Ports, Adani Power, Adani Green Energy, and Adani Total Gas shed up to 17 per cent intraday. Shares of IIFL Group companies – IIFL Securities, IIFL Finance, and 360 One WAM — also dropped up to 3.5%. Hindenburg had alleged that an Adani director had set up IPE-Plus Fund 1 through the former IIFL Wealth Management (now 360-One WAM) for investing in the Indian markets to artificially inflate and manipulate Adani group stock prices.