Hindenburg report: Cong urges Centre to remove ‘all conflict of interest’ in Adani probe
In a new report, Hindenburg has alleged that SEBI chief Madhabi Buch owned stakes in offshore entities linked to the Adani Group's alleged financial misconduct.
The Congress on Saturday reacted to the new report by Hindenburg Research, which alleged Securities and Exchange Board of India (SEBI) chief Madhabi Buch and her husband owned stakes in offshore entities linked to the Adani Group's alleged financial misconduct.
In a statement, Congress general secretary Jairam Ramesh said that SEBI's “strange reluctance” to investigate the “Adani MegaScam” has been noted for a long time.
He said that it is shocking that Buch would have a financial stake in the funds linked to Adani Group's alleged financial misconduct.
“SEBI's strange reluctance to investigate the Adani MegaScam has been long noted, not least by the Supreme Court's Expert Committee. That Committee had pointed out in its report that SEBI had in 2018 diluted and in 2019, entirely deleted the reporting requirements relating to the ultimate beneficial (i.e. actual) ownership of foreign funds,” Ramesh said in the statement.
"This had tied its hands to the extent that ‘the securities market regulator suspects wrongdoing, but also finds compliance with various stipulations in attendant regulations... It is this dichotomy that has led to SEBI drawing a blank worldwide,’ according to the Expert Committee," he added.
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Ramesh wrote that on August 25, SEBI told the Supreme Court's expert committee that it was investigating 13 suspicious transactions and “yet the probe never bore fruit”.
Ramesh added that Hindenburg Research's latest allegation raises fresh questions about Gautam Adani's two 2022 meetings in quick succession with Buch shortly after she was appointed as SEBI chairperson. “Recall that SEBI was supposedly investigating Adani transactions at the time,” he pointed out.
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He demanded that the government “must act immediately” to “eliminate all conflicts of interest” in the SEBI investigation of Adani Group-linked firms and also said the "seeming complicity of the highest officials of the land" can only be resolved by setting up a Joint Parliamentary Committee to investigate the full scope of the "scam".
Earlier, in a separate post, Ramesh had used the Latin phrase "Quis Custodiet Ipsos" or "who will guard the guards themselves"“ to take a swipe at Madhabi Buch.
He also wrote: "Parliament was notified to sit till the evening of August 12th. Suddenly it got adjourned sine die on the afternoon of Aug 9th itself. Now we know why."
What new Hindenburg report says
According to the Hindenburg, Madhabi Buch and her husband had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani, brother of Gautam Adani, to manipulate the financial markets. These investments reportedly date back to 2015, well before Madhabi Buch’s appointment as a whole-time member of SEBI in 2017 and her elevation to SEBI chairperson in March 2022.
The report alleges that just weeks before Buch’s appointment to SEBI, her husband requested the transfer of their investments into his sole control, potentially to avoid any scrutiny related to her new regulatory role.
"In the letter, Dhaval Buch requested to "be the sole person authorised to operate the Accounts", seemingly moving the assets out of his wife's name ahead of the politically sensitive appointment," it alleged.
The US investment research firm also said that 18 months since its “damning report” on Adani, "SEBI has shown a surprising lack of interest in Adani's alleged undisclosed web of Mauritius and offshore shell entities.".