Offshore fund gets SEBI Chair disturbed

Mesh of Allegations!

• The first female Chairperson of the India’s market regulator, Securities and Exchange Board of India, Madhabi Puri Buch discovers herself right amidst the allegations of offshore fund linked to Adani Scandal.
• After the Hindenburg Research brought in the serious accusations, SEBI stood strong with its Chief stating that its internal systems and procedures to manage potential conflicts of interest is absolutely full-proof.
• In August 2024, Hindenburg claimed a set of charges against SEBI Chief and her husband, Dhaval Buch had invested in offshore entities linked to Adani Group which was the same complex nested structure used by Vinod Adani reflecting the absence of transparency of SEBI into the Adani investigations.
• Dhaval Buch was a Senior Advisor in Blackstone Private Equity which procured benefits for the SEBI regulations on REITs.
• Hindenburg goes on to mention that Madhabi Puri Buch has 99% ownership in an Indian consulting firm, which earned nearly INR 2 crore. Not only that the SEBI Boss enjoyed 100% ownership in a Singapore consulting firm before transferring the ownership to her husband.

The Rebuttal

• Madhabi and Daval Buch issued an elaborate rebuttal to the Hindenburg report, claiming zero investments in Adani entities.
• Blackstone was added to Madhabi’s recusal list with SEBI on Dhaval’s appointment as an adviser to the investment fund. It clarifies that Dhaval’s role in the firm predates Madhabi’s appointment in SEBI.
• The couple clarified adding that two consulting firms set up by Madhabi became dormant on her appointment at SEBI.
• SEBI made a statement that allegations made by Hindenburg Research against the Adani Group have been duly investigated leading Madhabi Buch to rescue herself from conflict of interest.
• This incident led to an initial dip in the Adani stocks which again picked up with time.
• Madhabi Buch said that the allegations stemmed from their income tax returns which clearly have been procured by fraudulent means. She termed this move clear breach of right of privacy which is essentially a fundamental right of Indian citizen. Not only that, it is a solid violation of The Income Tax Act.
• A joint statement mentioned that the rent they received from a leased-out property and the lessee is an associate of Wokhardt, a listed company which have come under probe.

Opposition made noise

• Leader of the Opposition Rahul Gandhi and the CPM strongly called for Buch’s resignation, while the Congress and the TMC have demanded a Joint Parliamentary Committee (JPC) investigation into the claims. On the other hand, the BJP has dismissed the charges and accused the Opposition of using its ‘connections abroad’ to create ‘economic chaos.’
• The Congress came up with whole new set of allegations against Madhabi Puri Buch alleging that her husband Dhaval Buch received INR 4.78 crore between 2019 and 2021 from Mahindra and Mahindra (M&M) though M&M declared the information as ‘false and misleading.’
• The Parliament's Public Accounts Committee (PAC) has decided to review the performance of regulatory bodies established by Acts of Parliament.

Editor’s Note