Hindenburg Research on Saturday made serious allegations against Sebi chief Madhabi Puri Buch and her husband, Dhaval Buch, accusing them of conflicts of interest and questionable financial dealings linked to offshore entities. The allegations were firmly dismissed by both Madhabi and Dhaval Buch, who released a detailed statement addressing the claims on Sunday.
The Adani Group, also implicated in the report, panned the allegations, calling it baseless. It termed Hindenburg as a "discredited short-seller" under scrutiny for multiple violations of Indian securities laws, dismissing the allegations as "red herrings" thrown by an entity showing contempt for Indian regulations.
In their statement, Madhabi and Dhaval Buch refuted the charges made by Hindenburg Research. “There are certain allegations made against SEBI which would be addressed by the institution independently,” the release stated. However, they chose to clarify the accusations made against them personally.
Madhabi Puri Buch, an alumnus of IIM Ahmedabad with over two decades of experience in banking and financial services, and Dhaval Buch, an IIT Delhi graduate with a 35-year career at Hindustan Unilever Limited, said their investments and net worth have been accrued through years of professional work.
The release described the insinuations about their financial status and investments, especially in relation to Madhabi’s current government salary, as “malicious and motivated.”
The release further explained that from 2010 to 2019, Dhaval lived and worked in London and Singapore with Unilever. Madhabi also lived and worked in Singapore from 2011 to March 2017, first as an employee of a private equity firm and later as a consultant. The couple clarified that their investment in the fund mentioned by Hindenburg Research was made in 2015 when they were both private citizens residing in Singapore, nearly two years before Madhabi joined SEBI.
According to the statement, their decision to invest in this fund was based on the fact that the Chief Investment Officer, Anil Ahuja, was a longtime friend of Dhaval’s from school and IIT Delhi.
Ahuja, who had a strong investing career with experience at Citibank, J.P. Morgan, and 3i Group plc, was the key factor in their investment decision. “When in 2018 Mr. Ahuja left his position as CIO of the fund, we redeemed the investment in that fund,” the release stated. They also confirmed, with Ahuja’s affirmation, that at no point did the fund invest in any bonds, equities, or derivatives of any Adani group company.
The release also addressed Dhaval’s appointment as Senior Advisor to Blackstone Private Equity in 2019. The couple clarified that this role was due to Dhaval’s expertise in supply chain management and was publicly known long before Madhabi became Sebi Chairperson.
“On his appointment, the Blackstone Group was immediately added to Madhabi’s recusal list maintained with Sebi,” the statement said, ensuring there was no conflict of interest.
Over the last two years, SEBI has issued more than 300 circulars, including initiatives to ease doing business, all of which were approved by Sebi's board after extensive public consultation, not by the chairperson alone. The couple rejected insinuations that any regulations related to the REIT industry were favors to specific parties, labeling these claims as “malicious and motivated.”
The release also touched on two consulting companies Madhabi had set up during her time in Singapore. “These companies became immediately dormant on her appointment with Sebi, and all relevant disclosures were made to Sebi,” the statement read.
After Dhaval retired from Unilever in 2019, he continued his consultancy practice through these companies, working with prominent clients in India. The couple maintained that linking the earnings from these companies to Madhabi’s current government salary was unfounded.
Madhabi and Dhaval Buch reiterated that all their financial disclosures and recusals have been diligently followed according to Sebi's institutional mechanisms. They expressed disappointment that Hindenburg chose to attack their credibility instead of responding to the show-cause notice served to them for various violations in India. “It is unfortunate that instead of replying to the Show Cause Notice, they have chosen to attack the credibility of Sebi and attempt character assassination of the chairperson.”