In a counter to Sebi chief Madhabi Puri Buch's statement on Sunday over the allegations by Hindenburg Research, the US short-seller raised critical questions regarding potential conflicts of interest and the transparency of Buch's financial dealings in a post on Monday. Hindenburg's concerns challenge Buch’s claims, particularly regarding her investments and consulting entities during her tenure at Sebi, highlighting discrepancies and the need for further scrutiny.
Buch on her net worth, investments
Madhabi Puri Buch and her husband Dhaval, both with long corporate careers, have accrued their savings through salaries, bonuses, and stock options. They assert that insinuations about their net worth and investments, based on Madhabi’s government salary, are malicious and motivated. Dhaval worked with Unilever globally, and Madhabi lived and worked in Singapore from 2011 to 2017, initially with a Private Equity firm and later as a consultant. Their investment in a fund referred to in the Hindenburg report was made in 2015 when they were private citizens, almost two years before Madhabi joined SEBI.
Hindenburg's counter Hindenburg has questioned the transparency of Buch’s consulting entities, noting that one of her Indian entities remains 99% owned by her and is active, generating revenue even during her Sebi tenure. This, it claimed, raises questions about undisclosed income and potential conflicts with Sebi’s regulatory duties.
Buch on alleged Adani connection
Investments in the alleged IPE-Plus fund were made due to the credibility of the Chief Investment Officer, Anil Ahuja, a longtime friend of Dhaval’s with a strong investing background. They redeemed the investment in 2018 when Ahuja left his position as CIO. At no point did the fund invest in any Adani group companies. 360 ONE, the asset management firm, in a release denied any connection between its IPE-Plus Fund 1 and the Adani Group, stating that the fund did not invest in Adani Group shares, either directly or indirectly, at any point during its operation from October 2013 to October 2019.
Hindenburg's counter Buch’s statement confirms her investment in the Bermuda/Mauritius fund, allegedly linked to Vinod Adani, managed by a childhood friend of her husband, raising concerns of a massive conflict of interest, given Sebi’s role in investigating Adani-related funds.
Buch on alleged consulting charge Dhaval's appointment as Senior Advisor to Blackstone Private Equity in 2019 was due to his expertise in Supply Chain management and predated Madhabi’s SEBI appointment. He has never been associated with Blackstone's Real Estate side. Madhabi’s consulting companies became dormant upon her SEBI appointment, and all her shareholdings and disclosures were made to SEBI, the Singapore authorities, and the Indian tax authorities.
Hindenburg's counter They highlight discrepancies in Buch’s shareholding disclosures, particularly regarding the Singaporean consulting firm, which she continued to own during her time at Sebi, only transferring shares to her husband two weeks after becoming Sebi chairperson.
Buch on disclosures SEBI has strong disclosure and recusal norms, and all actions taken by Madhabi have adhered to these regulations. She also stated that Hindenburg had been served a show-cause notice for various violations, and their focus on attacking SEBI and her credibility is unfortunate.
Hindenburg's counter Hindenburg calls for Buch to release a full list of consulting clients and details of engagements through her offshore Singaporean firm, the Indian consulting firm, and any other related entities, to maintain the transparency she claims to uphold. Hindenburg has also demanded a full, transparent, and public investigation into these matters, questioning whether Buch has engaged in any other undisclosed investments or business activities through her husband while serving as SEBI Chairperson.