Hindenburg Claims SEBI Head Tied to Adani Offshore Fund Scandal

US short-seller Hindenburg Research has launched a new attack on SEBI chairperson Madhabi Buch, alleging she and her husband had stakes in offshore funds linked to the Adani money siphoning scandal. In a blog post, Hindenburg claimed that 18 months after its critical report on Adani, SEBI has shown little interest in investigating Adani's alleged undisclosed network of Mauritius and offshore shell entities.

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Hindenburg cited whistleblower documents stating that Madhabi Buch and her husband had stakes in obscure offshore funds involved in the Adani scandal. These funds, allegedly controlled by Vinod Adani, Gautam Adani's elder brother, were purportedly used to round-trip funds and inflate stock prices. "A declaration of funds, signed by a principal at IIFL, states that the source of the investment is salary and the couple's net worth is estimated at USD 10 million," Hindenburg said.

Allegations Against SEBI Chairperson

The current SEBI Chairperson and her husband, Dhaval Buch, reportedly had hidden stakes in the same offshore Bermuda and Mauritius funds used by Vinod Adani. Hindenburg alleged that on March 22nd, 2017, just weeks before Madhabi Buch's appointment as SEBI chairperson, Dhaval Buch wrote to Mauritius fund administrator Trident Trust about his and his wife's investment in the Global Dynamic Opportunities Fund (GDOF). The email requested that he be the sole person authorised to operate the accounts, seemingly moving assets out of his wife's name ahead of her politically sensitive appointment.

In January last year, Hindenburg Research accused the Adani Group of orchestrating the largest con in corporate history. They alleged that Adani used a web of companies in tax havens to inflate revenue and manipulate stock prices while accumulating debt. Although the conglomerate denied all allegations, the report caused a significant drop in the group's shares, wiping out over USD 150 billion in market value at their lowest point. Most of these losses have since been recovered.

SEBI's Investigation

Following the Hindenburg report, the Supreme Court directed SEBI to complete its investigation and established an expert panel to examine regulatory lapses. The panel did not issue any adverse findings against Adani, and the Supreme Court stated that no further probe beyond SEBI's was necessary. SEBI had been investigating 13 opaque offshore entities holding between 14% and 20% across five publicly traded stocks of the conglomerate even before Hindenburg's report.

Hindenburg also highlighted a later account statement dated February 26th, 2018, addressed to Madhabi Buch's private email. This statement revealed full details of the structure: GDOF Cell 90 IPEplus Fund 1. This is reportedly the same Mauritius-registered cell found several layers deep in a complex structure used by Vinod Adani.

No immediate comments were available from SEBI regarding these allegations. The ongoing scrutiny has raised questions about transparency and regulatory oversight within India's financial markets. The situation continues to unfold as stakeholders await further developments from SEBI's investigation into these claims.