According to US short seller Hindenburg Research, SEBI Chairwoman Madhabi Puri Buch has now publicly confirmed her investment in an obscure fund structure in Bermuda and Mauritius and asked her to come clean about the advisory clients her offshore advisory firms dealt with in Singapore and India.
A few hours after Buch and her husband released a statement calling Hindenburg’s recent tirade an attack on SEBI’s credibility and an attempted “character assassination,” Hindenburg said in a series of posts on X (formerly Twitter) that her response contained several important admissions and raised numerous new critical questions.
“Buch’s response now publicly confirms her investment in an obscure Bermuda/Mauritius fund structure, along with money allegedly diverted by Vinod Adani. She also confirmed that the fund was run by a childhood friend of her husband, who was an Adani director at the time,” it said.
“Undisclosed investments in offshore funds”
Hindenburg had alleged on Saturday (August 10) that SEBI chairwoman Madhabi Puri Buch and her husband had made undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same companies allegedly used by Vinod Adani – the elder brother of company chairman Gautam Adani – to transfer money and inflate share prices.
In response, Buch and her husband Dhaval Buch said in a joint statement on Sunday (11 August) that the investments were made in 2015, well before her appointment as a full-time member of SEBI in 2017 and subsequent appointment as chairperson in March 2022, in her capacity as “individuals residing in Singapore”. These funds became “dormant” upon her appointment to SEBI.
Hindenburg questions conflict of interest
“SEBI has been instructed to investigate mutual funds related to the Adani matter, including funds in which Ms Buch PERSONALLY INVESTED as well as funds of the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest,” Hindenburg said.
According to Buch’s statement, the investment in the two funds was made on the advice of Dhaval’s childhood friend Anil Ahuja – the person Hindenburg identified on Saturday as the founder and chief investment officer (CIO) of Mauritius-based IPE Plus Fund and who, according to an Adani group statement on Sunday, was a nominee of 3i Investment Fund for Adani Power (2007-2008) and served as a director of Adani Enterprises for three terms spanning nine years until June 2017.
“Agora Advisory in possession of Madhabi Book”
“Buch’s statement also claims that the two advisory firms she founded, including the Indian and the opaque Singaporean firm, “immediately became inactive after her SEBI appointment in 2017″ and her husband took over as head from 2019. According to the latest shareholder list dated March 31, 2024, Agora Advisory Limited (India) is still 99 percent owned by Madhabi Buch, not her husband. This firm is currently active and generating advisory revenue,” Hindenburg said.
In addition, according to Singapore records, she remained a 100% shareholder of Agora Partners Singapore until March 16, 2022 and owned the company throughout her time as a full-time member of SEBI.
“She transferred her shares into her husband’s name only two weeks after her appointment as SEBI chairperson,” Hindenburg claimed.
Buchs rejects “baseless allegations”
Madhabi Puri Buch and her husband Dhaval Buch strongly denied the “baseless allegations and insinuations in the report” in a joint statement on Sunday and said the allegations were “devoid of any truth”.
SEBI also defended its chairwoman. In a two-page statement, it said that Buch had made relevant disclosures from time to time and had “recused himself from matters involving potential conflicts of interest.”
Adani Group denies business relations with SEBI chief
The Adani Group too denied any business dealings with the SEBI chief, while asset management firm 360 ONE – formerly IIFL Wealth Management – separately said that Buch and her husband Dhaval Buch’s investment in IPE-Plus Fund 1 was less than 1.5 percent of total inflows and that there were no investments in Adani Group shares.
Hindenburg said the Singaporean consulting firm she founded does not publicly disclose its financial figures such as revenue or profit, and “therefore it is impossible to see how much money this company made during her time at SEBI.”
“The Indian company, which is still 99 percent owned by the SEBI Chairperson, has generated revenues of INR 23,985 crore (~US$ 312,000) (including through consultancy) during the financial years (22, 23 and 24) while she was the Chairperson, as per its financial reports,” it said.
Whistleblower documents
Citing whistleblower documents, Hindenburg stated that “Buch, while serving as a full-time member of SEBI, used her private email address for business purposes on behalf of her husband.”
“In 2017, weeks before her appointment as a full-time member of SEBI, she ensured that the accounts linked to Adani were registered ‘solely in the name of her husband Dhaval Buch,’ according to whistleblower documents.”
Although she denied control, a private email she sent a year after she began her tenure at SEBI reveals that she bought back shares in the funds on behalf of her husband, as per the whistleblower documents. This raises the question: “What other investments or deals did the SEBI chairperson make on behalf of her husband while serving in an official capacity?” it was asked.
According to Hindenburg, Buch said her husband used the consulting firms starting in 2019 to conduct business with unnamed “prominent clients in Indian industry.”
“Does this include customers whose regulation is the responsibility of SEBI?” the newspaper asked.
