Hindenburg Research, after its report on SEBI Chairperson Madhabi Puri Buch claiming that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal, has now responded to her accusations that the US-based short-seller is attempting a character assassination of the Buchs. In its fresh response on Sunday said that Buch’s own statement admits several of their concerns and questions.
Hindenburg said that the SEBI chief’s response “publicly confirms” her investment in an obscure Bermuda/Mauritius fund structure “alongside money allegedly siphoned by Vinod Adani”. It said that her response admitted that the fund was run by a childhood friend of her husband who at that time was an Adani director. It highlighted that this flagged a massive conflict of interest since SEBI was the organisation that was tasked with investigating investment funds relating to their previous report on the Gautam Adani-helmed conglomerate, which included funds that Buch was personally invested in, as well as funds by the same sponsor specifically highlighted by Hindenburg’s explosive report on Adani.
This is in reference to part of Buch’s statement that stated that the investment in the fund referred to by Hindenburg was made in 2015 when Madhabi and Dhaval Buch were private citizens living in Singapore and almost two years before she joined SEBI as a whole-time member. “The decision to invest in this fund was because the Chief Investment Officer, Anil Ahuja, is Dhaval’s childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, JP Morgan and 3i Group plc, had many decades of strong investing career,” she said adding that proof that these were the drivers of the investment is that when Ahuja left the fund in 2018, the Buchs redeemed their investment.
Referring to another part of Buch’s statement where she said that the two consulting companies set up by Buch, one in India and another in Singapore “became immediately dormant on her appointment with SEBI”, Hindenburg said that Agora Advisory Ltd is still 99 per cent owned by Madhabi Buch and not her husband.
Buch had said that the two consulting companies going dormant were “explicitly part of her disclosures to SEBI”. She said that once Dhaval left Hindustan Unilever in 2019, he started his own practice through these two companies. “When the shareholding of the Singaporean entity moved to Dhaval, this was once again disclosed, not just to SEBI, but also to the Singaporean authorities and the Indian tax authorities,” she had said.
“Per its latest shareholding list as of March 31st, 2024, Agora Advisory Limited (India), is still 99% owned by Madhabi Buch, not her husband. This entity is currently active and generating consulting revenue. Furthermore, Buch remained a 100% shareholder of Agora Partners Singapore until March 16th, 2022, per Singaporean records, owning it during her entire time as a SEBI Whole Time Member. She only transferred her shares into her husband’s name 2 weeks after her appointment as SEBI Chairperson,” it said.
Hindenburg stated that the Singaporean consulting entity she set up does not publicly report its financials like revenue or profit making it impossible to ascertain how much money they entity earned during her time at SEBI. The Indian entity which is 99 per cent owned by Buch, on the other hand, generated $312,000 in revenue through consulting during the financial years 2022, 2023 and 2024, while she served as SEBI chairperson, as per its financial statements, said Hindenburg.
The short-seller claimed that as per whistleblower documents, Buch used her personal email to do business using her husband’s name while serving as a whole-time member of SEBI. “In 2017, weeks ahead of her appointment as SEBI Whole Time Member, she ensured the accounts with ties to Adani “be registered solely in the name of Dhaval Buch", her husband, per whistleblower documents. Despite disclaiming control, a private email she sent a year into her SEBI term shows she redeemed stakes in the funds through her husband’s name, per the whistleblower documents,” said Hindenburg, further raising concerns about Buch’s investments or businesses that she engaged in through her husband’s name while serving in an official capacity.
“Buch said her husband used the consulting entities starting in 2019 to transact with unnamed “prominent clients in the Indian industry”. Do these include clients SEBI is tasked with regulating?” asked Hindenburg in a series of posts on X.
It asked if Buch would publicly release the “full list of consulting clients and details of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm and any other entity she or her husband may have an interest in?”
In its latest report, released on August 10, Hindenburg Research accused SEBI chairperson and her husband of having stakes in offshore funds involved in the Adani money siphoning scandal. Hindenburg's blogpost criticised SEBI's lack of action since its report on Adani 18 months ago. It alleged that Buch and her husband were linked to offshore funds in Bermuda and Mauritius used by Vinod Adani to inflate stock prices. Hindenburg questioned SEBI's investigation into Adani's offshore shareholders. Hindenburg accused Adani Group of manipulating stock prices and inflating revenue, which led to a significant drop in the group's market value. Although SEBI was already investigating Adani, it has not yet completed its probes. Hindenburg's recent claims suggest that Buch and her husband had investments in the same offshore funds used by Vinod Adani, dating back to 2015.