The controversy surrounding the Adani Group has deepened with fresh allegations from Hindenburg Research, claiming that Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch has stakes in offshore funds tied to the conglomerate. These allegations have added to the ongoing scrutiny of the Adani Group, which has been accused of stock manipulation and financial irregularities by the short-selling firm since early 2023.
In response to Hindenburg's claims, 360 ONE Asset Management, the company that launched the IPE-Plus Fund 1, issued a strong denial. The asset management firm, previously known as IIFL Wealth Management Limited, clarified that the fund, which operated between October 2013 and October 2019, never invested in Adani Group shares, either directly or indirectly. The company emphasized that the fund was fully compliant and regulated and that the Sebi chief and her husband’s holdings represented less than 1.5% of the total inflow into the fund. Additionally, the company asserted that no investor, including the Buchs, had any involvement in the fund's operations or investment decisions.
The latest allegations by Hindenburg Research suggest that Buch's alleged stake in the offshore funds may have influenced Sebi's investigation into the Adani Group, raising concerns about a potential conflict of interest. The report also claimed that Sebi has been reluctant to conduct a thorough investigation into the Adani Group due to this alleged conflict.
The Adani Group has vigorously denied the allegations, characterizing them as "malicious, mischievous, and manipulative." The conglomerate accused Hindenburg Research of recycling discredited claims that have already been debunked in court. The group also described the allegations as a calculated attempt to damage its reputation and standing, dismissing them as baseless and manipulative.
Madhabi Puri Buch and her husband, Dhaval Buch, have also responded to the allegations, calling them an attempt at "character assassination." In a joint statement, the couple rejected the claims made by Hindenburg, describing them as "baseless" and asserting that their financial dealings have always been transparent and above board.
This latest development has further intensified the political controversy surrounding the Adani Group. Opposition parties in India, particularly the Congress, have called for immediate government action to eliminate any potential conflicts of interest in Sebi's investigation of the Adani Group. The opposition has also reiterated its demand for a joint parliamentary committee (JPC) to probe the matter thoroughly.
The controversy began in January 2023 when Hindenburg Research released a report accusing the Adani Group of engaging in stock manipulation and accounting fraud to artificially inflate its stock prices. The report alleged that the conglomerate used a network of offshore funds and entities to manipulate its stock prices, leading to significant market distortions. Following the release of the report, the Supreme Court of India directed Sebi to investigate the allegations, and the market regulator has since been conducting its inquiry, though it has not yet released its final findings.
In July 2024, Sebi issued a show cause notice to Hindenburg Research, accusing the firm of misleading the market by falsely claiming it had no direct or indirect exposure to Adani Group shares listed in India. This legal action by Sebi is part of the ongoing fallout from the initial Hindenburg report.
As the investigation continues, the allegations and counterclaims surrounding the Adani Group and Sebi's role in the matter are likely to remain a significant point of contention in India's financial and political landscape. The outcome of this controversy could have far-reaching implications for regulatory oversight and corporate governance in the country.
Â
