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The chair of India’s capital markets regulator held stakes in an offshore fund structure used by Vinod Adani, holding the agency back in investigating fraud charges against the powerful eponymous conglomerate run by his billionaire brother, according to fresh allegations levelled by US short seller Hindenburg Research.
Madhabi Buch, head of the Securities and Exchange Board of India, and her husband had “hidden” holdings in Bermuda and Mauritius entities also drawn upon by the older brother of Adani Group founder Gautam Adani, Hindenburg Research said in a post late on Saturday, citing leaked documents in its possession.
In a statement, the couple said that they “strongly deny the baseless allegations and insinuations made in the report”.
The latest allegations were made 18 months after Hindenburg first accused Adani’s infrastructure-focused empire of corporate fraud and detailed a web of offshore funds it said were used to evade minimum shareholder listing rules. At the time, it prompted a meltdown across the conglomerate’s listed companies and erased $140bn in market value.
Sebi has yet to make public findings from multiple long-running probes into the Adani Group after India’s Supreme Court in January ordered it to wind up the 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 sensationalised and distorted certain facts”.
Hindenburg, making reference to previous Financial Times reporting on Adani’s links to offshore vehicles, said it suspected the alleged fund holdings by Buch — a former chief executive at India’s ICICI Securities who has chaired Sebi since 2022 — were reasons for the regulator’s “unwillingness to take meaningful action” against Adani’s offshore shareholders.
“We do not think Sebi can be trusted as an objective arbiter in the Adani matter,” Hindenburg said.
The couple first made the 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 advisory role with investment manager Blackstone, which has sponsored Indian Reits.
“Our life and finances are an open book,” the couple said in response to the allegations. “All disclosures as required have already been furnished to Sebi over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens.”
Adani Group called Hindenburg’s latest allegations “malicious, mischievous and manipulative”, adding “our overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents”. The conglomerate said it “has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing”.
Dhaval Buch, a former chief procurement officer at Unilever, has been a senior advisor to Blackstone Private Equity since 2019 on procurement and supply chain topics, and is not involved in investment-related activities, including real estate or Reits, said a person familiar with the matter. A Blackstone representative declined to comment.
The renewed scrutiny raised by Hindenburg comes at an awkward time for Adani, which has mounted renewed expansion efforts at home and abroad, and is in the midst of its first share sales since scrapping a $2.4bn raise last year after the short seller’s initial barrage.
That first Hindenburg report into Adani was also used by India’s opposition as a line of attack against Prime Minister Narendra Modi, particularly ahead of this year’s elections, due to his perceived closeness to the tycoon and alleged favouritism, which both have played down and denied.
Jairam Ramesh, a spokesperson for the opposition Indian National Congress, said that it was “shocking that Buch would have a financial stake in these same funds” that were alleged to have amassed “large stakes in Adani Group companies in violation of Sebi regulations”.
Ramesh added that it also raised “fresh questions” about Buch’s two meetings with Gautam Adani in 2022 shortly after she was appointed chair of the market regulator.
