Hindenburg Research has made waves with a new report targeting Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch and her husband, Dhaval Buch. The report alleges that whistleblower documents reveal the Buchs had a stake in obscure offshore entities connected to what has been dubbed the "Adani money siphoning scandal." According to Hindenburg, these offshore stakes were part of a complex financial web used by Vinod Adani, a key figure in the Adani Group, to facilitate questionable financial activities. The report further insinuates that the Buchs made these investments before Madhabi Puri Buch's tenure at Sebi and later transferred the stakes to evade scrutiny, casting a shadow over the regulatory authority's integrity.
In response to the allegations, the Buchs have strongly refuted the claims, describing them as "groundless" and "without merit." They emphasized that their financial records have always been transparent, dismissing the accusations as an attempt at "character assassination." The Buchs clarified that their investment in the IPE Plus Fund 1, managed by 360 ONE Asset and Wealth Management, was made back in 2015 while they were living in Singapore, nearly two years before Madhabi Puri Buch joined Sebi as a whole-time member. They pointed out that the investment was made based on their confidence in Anil Ahuja, the Chief Investment Officer of the fund, who was a longtime friend of Dhaval Buch. When Ahuja left his position in 2018, the Buchs redeemed their investment, further distancing themselves from any connection to the Adani Group.
The Buchs' rebuttal has garnered support from industry leaders, who have voiced their backing for Madhabi Puri Buch in the face of what they perceive as unfounded attacks. Mohandas Pai, former CFO of Infosys, was quick to criticize Hindenburg's report, labeling it as "character assassination by a vulture fund." He dismissed the claims as sensationalist tactics meant to create unnecessary alarm. Deepak Shenoy, CEO of Capitalmind, echoed this sentiment, suggesting that the report was more about generating headlines than presenting valid concerns. Shenoy noted that the allegations seemed overblown and lacked substantive evidence to warrant serious consideration.
Meanwhile, Sebi has also come forward to dismiss the allegations, particularly the claim that changes to Real Estate Investment Trust (REIT) rules were influenced by Dhaval Buch's employment with Blackstone, a global investment firm. Sebi clarified that all amendments to REIT regulations follow a rigorous consultation process, involving multiple stakeholders, and are not subject to individual influence. The regulatory body stressed that Dhaval Buch had no involvement with Blackstone's real estate sector and reaffirmed its commitment to transparency and addressing any potential conflicts of interest.
The Adani Group, which has been at the center of Hindenburg's previous allegations, has categorically rejected the latest claims. The conglomerate issued a strong statement, calling the allegations "malicious, mischievous, and manipulative." The Adani Group characterized the new report as a "recycling of discredited accusations" that have already been proven baseless in court. Despite the group's forceful rebuttal, their stocks experienced a decline on Monday, with Adani Ports and Adani Enterprises among the top losers on the Nifty50 index, reflecting the market's initial unease in the wake of the report.
However, despite the noise generated by Hindenburg's latest report, the overall impact on the Indian stock market was limited. Both the S&P BSE Sensex and NSE Nifty50 closed slightly lower on Monday, indicating that the market had largely shrugged off the sensational allegations. Market analysts observed that while the ongoing Adani-Hindenburg-Sebi saga contributed to some volatility, investors remained focused on broader economic indicators rather than the claims presented in the report. The market's response was shaped by positive cues from global trends and expectations of easing inflation, which overshadowed the speculative concerns raised by Hindenburg. The muted reaction suggests that while Hindenburg's claims have sparked discussion, the market and industry experts are approaching the allegations with skepticism, prioritizing concrete economic factors over unsubstantiated accusations.
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