Hindenburg row: ‘Allegations will weaken SEBI chief,’ says former finance secretary

Former finance secretary Subhash Chandra Garg said that Hindenburg Research allegations undermine the SEBI chief’s credibility and could weaken her position.

Former finance secretary Subhash Chandra Garg on Tuesday said that the Hindenburg Research allegations target the Securities and Exchange Board of India (SEBI) chief and her husband, not Adani directly.

Hindenburg Research in a new report released on Saturday alleged that SEBI chief Madhabi Puri Buch held investments in certain offshore funds that were also used by the Adani group.

“The new report (Hindenburg allegations) which has come is targeted against Madhabi Buch and her husband. It's not exactly about Adani. The implication is that what Madhabi Buch and her husband did in terms of investments into some offshore funds which the Adani executives…,” Garg told PTI.

He warned that the allegations undermine the SEBI chief’s credibility and could weaken her position.

“This is a direct allegation against the SEBI chief's ability to conduct an investigation against Adani. I think this is quite serious and it will be difficult for the SEBI chairperson to defend herself, which will weaken her in the times to come,” Subhash Chandra added.

Hindenburg Research on Saturday released a report that alleged the Securities and Exchange Board of India (SEBI) did not act on claims it made in the US firm's 2023 report against the Adani Group because the market regulator's chief, Madhabi Puri Buch, had investments in offshore firms linked to the conglomerate.

Hindenburg Research allegations

Citing documents from whistleblowers, the firm claimed that Sebi chief Madhabi Buch and her husband Dhaval Buch had made investments, dating back to 2015, in offshore funds in Bermuda and Mauritius linked to entities allegedly used by the Adani Group to manipulate financial markets.

Their recent claims come on the heels of another investigative report released in January 2023, which alleged that the Adani group had orchestrated the “largest con in corporate history” through stock manipulation and financial misconduct.

Hindenburg Research's 2023 report had led to massive losses for the Adani group, wiping off over 100 billion dollars off their market valuation.

Hindenburg Research is a US-based investment research firm, founded by researcher Nathan Anderson. The company specialises in forensic financial research, conducting investigations and analyses on accounting irregularities, unethical business practices, and undisclosed financial issues or transactions.