Madhabi Puri Buch Junks Hindenburg Claims, Says Made Investments In Adani Group 2yrs Before Joining SEBI

Securities and Exchange Board of India (Sebi) Chairpersonabi Puri Buch and her husband Dhaval Buch issued a detailed statement on Sunday. They countered allegations from US short-seller Hindenburg Research. The Buchs clarified that their investment in the fund, which Hindenburg linked to the alleged "Adani stock manipulation", was made two years before Madhabi joined Sebi.

The Buchs explained that their investment in IPE Plus Fund 1, managed by 360 ONE Asset and Wealth Management (formerly IIFL Wealth Management), was made in 2015. This was "when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member," according to their statement.

Investment Decision Based on Trust

The decision to invest was influenced by the Chief Investment Officer, Anil Ahuja, who is Dhaval's childhood friend from school and IIT Delhi. Ahuja had a strong investing career with Citibank, JP Morgan, and 3i Group plc. "The fact that these were the drivers of the investment decision is borne out by the fact that when, in 2018, Mr Ahuja left his position as CIO of the fund, we redeemed the investment in that fund," the statement read.

On Saturday, Hindenburg Research released its second whistleblower report on Adani Group. It claimed Madhabi Puri Buch had a stake in offshore entities involved in the "Adani money siphoning scandal". According to Hindenburg, IPE Plus Fund is a small offshore Mauritius fund set up by an Adani director through IIFL. It accused Vinod Adani of using this structure to invest in Indian markets with funds allegedly siphoned from over-invoicing power equipment to the Adani Group.

Hindenburg's Allegations

Hindenburg alleged that weeks before Buch's appointment to Sebi, her husband requested transferring their investments into his sole control to avoid scrutiny related to her new regulatory role. The report also claimed Madhabi Buch used her private Gmail account while at Sebi to redeem units in the fund through her husband's name.

The couple refuted these claims as "baseless" and "devoid of any truth", asserting their finances were transparent. They described it as an attempt at "character assassination". The firm managing the fund also denied Hindenburg's claims, stating that IPE-Plus Fund 1 made "zero investments in any shares of the Adani Group either directly or indirectly through any fund".

Official Responses

360 ONE Asset Management clarified that Madhabi and Dhaval Buch's holdings in the fund were less than 1.5 percent of the total inflow into the fund. The latest Hindenburg report follows its first whistleblower claim against Adani Group 18 months ago, which led to a significant drop in Adani's stock value. The short-selling firm accused Adani Group of orchestrating "the largest con in corporate history" by using tax haven companies to inflate revenue and manipulate stock prices while accumulating debt.

Following Hindenburg's initial report, the Supreme Court directed Sebi to complete its investigation and established an expert panel for regulatory lapses review. The panel found no adverse findings against Adani, and the top court stated no further probe beyond Sebi's was necessary.

Political Reactions

In light of fresh allegations, opposition parties urged immediate government action to eliminate all "conflicts of interest" in Sebi's investigation of the Adani Group. They reiterated demands for a Joint Parliamentary Committee probe into the matter and called for Madhabi Buch's removal as Sebi head.

Sebi served a show cause notice to Hindenburg on June 26, accusing it of "deliberately sensationalising and distorting certain facts" while collaborating with a New York hedge fund for financial gain.