Adani's reply to Hindenburg's allegations, said- no relation with SEBI chief

Gautam Adani News: American research and investment company Hindenburg Research has accused market regulator Securities and Exchange Board of India (SEBI) chairperson Madhavi Puri Buch and her husband of having stakes in a foreign fund linked to Adani. However, the SEBI chief has termed the allegation as completely baseless. On the other hand, Adani Group has also issued a statement in this matter. Adani Group has clarified that their group has no business relationship with the SEBI chief. Baseless allegations are being made by Hindenburg.

Hindenburg said in its new report released late Saturday that SEBI Chairperson Buch and her husband Dhabal Buch have stakes in the foreign fund that was used for alleged money laundering in the Adani Group. Meanwhile, the Congress has demanded immediate action from the Center to eliminate all conflicts of interest in the Adani Group regulatory investigation. The opposition party has also demanded the formation of a JPC to find out the alleged collusion of the country's top officials and to fully investigate the scam.

No connection

Responding to the Hindenburg report, the Adani Group said that the Adani Group has no commercial connection with the people or cases mentioned in the report. The group rejected all the allegations and said that it rejects the allegations leveled against its companies and reiterates that the structure of its foreign holdings is completely transparent. The Hindenburg report says about the Adani Group that it weaved a web of companies and transferred funds from one place to another.

Allegations termed baseless

At the same time, the SEBI chief and her husband have jointly issued a statement rejecting Hindenburg's allegations outright and calling it completely baseless. He said that the allegations leveled in the report are completely baseless and unfounded. There is not an iota of truth in them. Our life and financial situation are like an open book. All the necessary disclosures have already been made to SEBI over the years. We have no hesitation in disclosing any financial documents. Buch said that it is unfortunate that in response to the enforcement action and show cause notice issued by SEBI against Hindenburg Research, an attempt has been made to surround and defame us. He also said that keeping in mind full transparency, a detailed statement will be issued in due time.

Allegations against Hindenburg's SEBI chief

In a blogpost 18 months after its last report on Adani, Hindenburg alleged that SEBI has surprisingly shown no interest in investigating Adani's alleged undeclared net of Mauritius and foreign shell units. Citing whistleblower documents, the investment company said that current SEBI chief Buch and her husband had stakes in both the shadowy offshore funds used in the money embezzlement scam at the Adani Group. Vinod Adani, the elder brother of group chairman Gautam Adani, allegedly controlled the shadowy offshore funds Bermuda and Mauritius funds. Hindenburg alleges that these funds were used to embezzle money and increase the price of the group's shares.

How much is Buch's net worth

Hindenburg said in its latest report that the fund declaration signed by a chief at IIFL states that the source of investment is salary and the couple's net worth is estimated at US$10 million. The report alleges that the documents show that despite thousands of well-reputed Indian mutual fund products, SEBI chairperson Madhavi Buch and her husband had stakes in a multi-layered offshore fund with low assets.

Hindenburg said that their assets passed through high-risk jurisdictions. It was overseen by a company allegedly linked to the scam. This is the same entity that was run by Adani's director and was used significantly by Vinod Adani in the alleged Adani cash manipulation scam. Funds that invest in foreign markets are called offshore funds. These are also called foreign funds. The report also cited the Supreme Court order. In which it was said that SEBI remained empty-handed in the investigation of who financed Adani's alleged foreign shareholders.

This thing came to the fore

Hindenburg said that if SEBI really wanted to find foreign fund holders, then perhaps the SEBI chairperson could start by looking at herself in the mirror. It said that we do not find it surprising that SEBI did not want to pursue the matter, which went to its own head. Hindenburg said the current SEBI chairperson and her husband Dhawal Buch hid their stake in the same obscure offshore Bermuda and Mauritius funds, which were found in the same complex structure used by Vinod Adani.

According to the report, documents obtained from a whistleblower show that just weeks before Buch was appointed SEBI chairperson on March 22, 2017, Dhawal Buch wrote an email to Mauritius fund administrator Trident Trust. This email was about his and his wife's investment in the Global Dynamic Opportunities Fund (GDOF).

These allegations were made 18 months ago

Earlier in January, Hindenburg Research had alleged that the Adani Group had been openly involved in stock manipulation and accounting fraud. However, the group had termed this allegation as completely baseless. It said that this was done with the wrong intention of harming its share sale and nothing else. At that time, Adani Group's flagship company Adani Enterprises was preparing to launch an FPO of Rs 20,000 crore.

The group, which is working in the port to energy sector, had said that the report was prepared based on nothing but selectively wrong and baseless information and its purpose is completely malicious. The facts on the basis of which the report has been prepared have also been rejected by the courts of India. After the report, the shares of Adani Group had fallen, although later it managed to recover from the loss.