#93 Newsletter

Market Watch

Market Commentary

Hindenburg Research v/s Madhabi Puri Buch ?

The Hindenburg v/s Adani battle took an uglier turn last week when the short-seller levelled allegations against current SEBI Chief - Madhabi Puri Buch — over alleged conflicts of interest and her private investments in Vinod Adani-linked offshore funds.

Here’s a summary of it:

I. Background: SEBI’s Inaction on Adani Allegations

- Hindenburg Report: Nearly 18 months ago, Hindenburg Research released a report alleging that the Adani Group engaged in large-scale undisclosed related party transactions using offshore shell entities.

- SEBI’s Response: Despite overwhelming evidence and corroboration by over 40 independent media investigations, the Securities and Exchange Board of India (SEBI) has taken no public action against Adani.

- Show Cause Notice: SEBI instead issued a notice to Hindenburg in June 2024, questioning their report without disputing its factual accuracy.

II. Vinod Adani’s Offshore Investments

- Over-Invoicing Allegations: Adani’s brother, Vinod Adani, allegedly siphoned funds through over-invoicing of power equipment, directing these through offshore entities.

- Complex Fund Structures: Funds from Vinod Adani were routed through entities in Bermuda and Mauritius, managed by Indian Infoline (IIFL), a firm linked to the Wirecard scandal.

III. Madhabi Buch’s Offshore Stakes

- Conflict of Interest: Whistleblower documents reveal that Madhabi Buch, SEBI’s current Chairperson, and her husband held stakes in the same offshore funds used by Vinod Adani.

- Account Management: Before she was appointed SEBI Chairperson, Buch’s husband transferred control of these investments to himself.

IV. Blackstone and SEBI’s Regulatory Changes

- Unusual Appointment: During Buch’s tenure at SEBI, her husband was appointed as a Senior Advisor to Blackstone, a major player in India’s REIT sector.

- Regulatory Benefits: under Buch’s leadership, SEBI introduced regulations that significantly benefited Blackstone’s REIT operations in India.

V. Agora Advisory and Potential Conflicts

- Consulting Business: Madhabi Buch owns a 99% stake in Agora Advisory, an Indian consulting firm that earned $261,000 in revenue in 2022, raising further questions about potential conflicts of interest.

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