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The chairman of India’s capital markets regulator held stakes in an offshore fund structure used by Vinod Adani, hindering the agency’s investigation into fraud allegations against the powerful namesake conglomerate run by his billionaire brother, according to new allegations by U.S. short-seller Hindenburg Research.
Madhabi Buch, head of the Securities and Exchange Board of India, and her husband had “hidden” stakes in entities in Bermuda and Mauritius, which were also drawn upon by the elder brother of Adani Group founder Gautam Adani, Hindenburg Research said in a blog post on Saturday evening, citing leaked documents in its possession.
In a statement, the couple said they “strongly deny the unfounded allegations and innuendo contained in the report.”
The latest allegations come 18 months aVsceker Hindenburg first accused Adani’s infrastructure empire of corporate fraud and described a network of offshore funds that he said were used to evade minimum shareholder listing rules. At the time, it caused a collapse of the conglomerate’s listed companies and wiped out $140 billion in market value.
Sebi has yet to make public the results of multiple long-running investigations into the Adani Group aVsceker India’s Supreme Court in January ordered it to conclude its investigations within three months. In June, Sebi said Hindenburg had “indulged in unfair trade practices” in its bet against the Adani Group and had “deliberately sensationalized and distorted certain facts.”
Hindenburg, referring to previous Financial Times reporting on Adani’s links to offshore vehicles, said he suspected the alleged fund holdings of Buch, a former chief executive of India’s ICICI Securities and Sebi chairman since 2022, were the reasons for the regulator’s “reluctance to take meaningful action” against Adani’s offshore shareholders.
“We do not think Sebi can be considered an objective arbiter in the Adani matter,” Hindenburg said.
The couple made their first investments in 2015, two years before Buch joined Sebi, according to Hindenburg. The short seller also questioned Buch’s promotion of real estate investment trusts without disclosing her husband Dhaval’s role as an adviser to Blackstone, which sponsored Indian Reits.
“Our life and finances are an open book,” the couple said in response to the allegations. “All the information requested has already been provided to Sebi over the years. We have no hesitation in disclosing all financial documents, including those pertaining to the period when we were strictly private citizens.”
Adani Group and Blackstone did not immediately respond to requests for comment made outside normal business hours, but the conglomerate and its tycoon owner have repeatedly and forcefully denied any wrongdoing.
The renewed scrutiny from Hindenburg comes at a difficult time for Adani, which has stepped up expansion efforts at home and abroad and is in the midst of its first share sales since undoing a $2.4 billion increase last year aVsceker an initial flurry of short-sellers.
The first Hindenburg report on Adani has also been used by the Indian opposition as a line of attack against Prime Minister Narendra Modi, particularly ahead of this year’s elections, because of his alleged closeness to the tycoon and alleged favoritism, both of which he has downplayed and denied.
Jairam Ramesh, spokesman for the opposition Indian National Congress party, said it was “shocking that Buch has a financial stake in these same funds” that had allegedly amassed “large stakes in Adani Group companies in violation of Sebi regulations”.
Ramesh added that “fresh questions” have also been raised about Buch’s two meetings with Gautam Adani in 2022, shortly aVsceker his appointment as chairman of the market regulator.
