Hindenburg Research has raised serious concerns about potential conflicts of interest involving SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval, particularly focusing on their link to Real Estate Investment Trusts (REITs).
The report highlights Dhaval Buch’s advisory role at Blackstone, a major investor in this sector. REITs are specialized entities that own, manage, or finance income-generating real estate, offering a way for investors to earn dividends from property investments without owning or managing properties directly.
REITs in India have grown rapidly, partly due to regulatory support and changes that have made it easier for these entities to flourish.
During Madhabi Buch’s time at SEBI, several significant REITs were approved and went public, with Blackstone playing a prominent role as a sponsor.
Hindenburg in its report has alleged Dhaval Buch joined Blackstone as a Senior Advisor in July 2019, shortly after SEBI approved India’s first REIT, Embassy, which was sponsored by Blackstone. The report highlights that Dhaval Buch, who previously served as Chief Procurement Officer at Unilever, had “never worked for a fund, in real estate or at a capital markets firm,” yet was appointed to a significant advisory role at Blackstone.
The report alleges, "Blackstone has been one of the largest investors and sponsors of REITs, a nascent asset class in India."
The report goes on to detail that during Dhaval Buch’s tenure as an advisor at Blackstone, the firm sponsored Mindspace and Nexus Select Trust, which became India’s second and fourth REITs to receive SEBI approval and go public.
Hindenburg alleges that Sebi brought in several regulatory changes during this period that were beneficial to private equity firms like Blackstone, including multiple consultation papers, updates, and new frameworks for REITs. The report states, "During Dhaval Buch’s time as senior advisor, while his wife was a SEBI official, Blackstone sponsored Mindspace and Nexus Select Trust, India’s second and fourth REIT to receive SEBI approval to publicly IPO."
Dhaval Buch's LinkedIn profile indicates that he currently holds senior advisory roles at Blackstone and Alvarez & Marsal, in addition to serving as a non-executive director on the Board of Gildan.
An alumnus of the Indian Institute of Technology, Delhi (IIT-D), where he graduated in mechanical engineering in 1984, Buch was an Executive Director at Unilever, where he eventually became Chief Procurement Officer. In his LinkedIn profile, Buch highlights his "deep experience in procurement and all aspects of the supply chain."
In addition to the REIT-related allegations, the report also raises concerns about the Buchs' involvement in offshore entities. Hindenburg cites documents purportedly obtained from a whistleblower that suggest Dhaval Buch took steps to manage their investments in offshore funds, potentially to avoid conflicts of interest as Madhabi Buch was about to take on her role at SEBI.
Buch has dismissed the allegations, describing them as "baseless" and an attempt at "character assassination." In a joint statement with her husband, Dhaval Buch, the Sebi chairperson declared their willingness to disclose all financial records.