Hindenburg-Sebi Chief Saga: Madhabi Puri Buch & her husband deny allegations, label them as 'character assassination attempt'

Shortly after US-based short seller Hindenburg Research alleged that Sebi Chairperson Madhabi Buch and her husband had stakes in "both the obscure offshore entities used in the Adani money siphoning scandal", the Sebi chairperson and her husband issued a joint statement rejecting the allegations, asserting that their lives and finances are "an open book". The Buch duo also said that it is unfortunate that Hindenburg Research, against whom Sebi had taken enforcement action and issued a show cause notice, has chosen to "attempt character assassination".

"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," read the statement by the Buchs. 

Here are five key takeaways from the joint statement issued by Madhabi Puri Buch and Dhaval Buch: 

• Allegations baseless, devoid of any truth
• Our lives 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
• In the interest of complete transparency, we would be issuing a detailed statement in due course 
• Unfortunate that Hindenburg Research, against whom Sebi has taken enforcement action and issued a show cause notice, has chosen to attempt character assassination 

What does Hindenburg report say?

In a blog post released on Saturday, Hindenburg Research wrote that 18 months since its report on Adani, "Sebi has shown a surprising lack of interest in Adani's alleged undisclosed web of Mauritius and offshore shell entities."

"Madhabi Buch, the current chairperson of Sebi, and her husband had stakes in both obscure offshore funds used in the Adani money siphoning scandal," Hindenburg wrote in the post, citing whistleblower documents. 

Hindenburg also wrote: "We had previously noted Adani's total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani's relationship with Sebi Chairperson Madhabi Buch."

"What we hadn't realised: the current Sebi chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani," noted the Hindenburg report.

"Madhabi Buch and her husband Dhaval Buch first appear to have opened their account with IPE Plus Fund 1 on June 5, 2015, in Singapore, per whistleblower documents. A declaration of funds, signed by a principal at IIFL states that the source of the investment is 'salary' and the couple's net worth is estimated at $10 million," it added.

In January 2023, Hindenburg published a report accusing the Adani Group of financial irregularities, stock manipulation, and fraud, triggering a significant drop in the group's stocks. The Adani conglomerate has rubbished these claims.

With inputs from agencies