Sebi Chairperson Madhabi Puri Buch and her husband Dhaval Buch issued a joint statement late on Saturday rejecting allegations levelled against them by US-based short seller Hindenburg Research, which claimed, citing whistleblower documents, that the duo had held stakes in obscure offshore funds used in the alleged Adani money siphoning scandal. Hindenburg's allegations come roughly one-and-a-half year after alleging that billionaire Gautam Adani was running the "largest con in corporate history". Madhabi Puri Buch and her husband accused Hindenburg Research, against whom the capital market regulator has taken enforcement action, of "character assassination", stating that the allegations are "baseless" and "devoid of any truth". 

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Alleging that the market regulator has "shown a surprising lack of interest In Adani’s alleged undisclosed web of Mauritius and offshore shell entities", Hindenburg wrote on its website, hindenburgresearch.com: "It has been nearly 18 months since our original report on the Adani Group presented overwhelming evidence that the Indian conglomerate was operating 'the largest con in corporate history'. Our report exposed a web of offshore, primarily Mauritius-based shell entities used for suspected billions of dollars of undisclosed related party transactions, undisclosed investment and stock manipulation."

"Since then, despite the evidence, along with over 40 independent media investigations corroborating and expanding on our original work, Indian securities regulator Sebi has taken no public action against the Adani Group. Media has reported that SEBI is likely to impose mere token, technical violations on the Adani Group despite the breadth and magnitude of the issues," Hindenburg wrote. 

"Instead, on June 27th, 2024, SEBI sent us an apparent ‘show cause’ notice. SEBI did not allege any factual errors in our 106-page analysis, but instead claimed the disclosure around our short position – which we disclosed repeatedly – was deficient, arguing that we should have provided even more robust disclosure... The Sebi notice also claimed our report was “reckless” for quoting a banned broker with specific experience dealing with SEBI who detailed how the regulator was fully aware that firms like Adani used complex offshore entities to flout rules, and that the regulator participated in the schemes," the US-based company wrote on its website. 

"In our July 2024 response to the ‘show cause’ notice, we wrote that we found it odd how SEBI—a regulator specifically set up to prevent fraudulent practices – showed little interest in meaningfully pursuing the parties that ran a secret offshore shell empire engaging in billions of dollars of undisclosed related party transactions through public companies while propping up its stocks through a network of sham investment entities," it wrote.

"As detailed in our original Adani report, documents from the Directorate of Revenue Intelligence (DRI) alleged that Adani 'grossly' overvalued the import valuation of key power equipment, using offshore shell entities to siphon and launder money from the Indian public... A subsequent investigation by non-profit project Adani Watch in December 2023 showed how a web of offshore entities, controlled by Gautam Adani’s brother, Vinod Adani, were recipients of funds from the alleged over-invoicing of power equipment," Hindenburg added.

'Our life and finances an open book,' say Madhabi Puri Buch and Dhaval Buch 

Madhabi Puri Buch and her husband Dhaval Buch categorically rubbished the allegations made by Hindenburg. In a joint statement, Madhabi Puri Buch and Dhaval Buch strongly denied the "baseless allegations and insinuations" made in the report dated August 10. "The same are devoid of any truth. Our life and finances are an open book. All disclosures as required have already been furnished to Sebi over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them. Further, in the interest of complete transparency, we would be issuing a detailed statement in due course," they wrote. 

"It is unfortunate that Hindenburg Research against whom Sebi has taken an Enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same," added Madhabi Puri Buch and Dhaval Buch in their statement.  

Earlier on Saturday, the US-based firm took to microblogging site X (formerly Twitter) to hint at a possible new India-centric report.

"Something big soon India," said the post on the X social media account of Hindenburg Research.

In January 2023, it published a report accusing the Adani group of financial irregularities, fraud and stock manipulation, leading to a significant drop in Adani group stocks reportedly to the tune of more than $100 billion. 

The Adani group has repeatedly denied all the accusations in the Hindenburg Research report.

The US short seller's report was published two days before a $2.5 billion follow-up public offering was issued by Adani Enterprises.

Later, the conglomerate called off the Rs 20,000-crore fully-subscribed follow-on public offer (FPO).