Hindenburg Report: A major political row erupted after Hindenburg Research, a US-based short-seller, accused Madhabi Puri Buch, chairperson of India’s market regulator SEBI, of having stakes in obscure offshore entities connected with what is being referred to as ‘the Adani money siphoning scandal.’ The development has seen opposition parties stiffen their attack on the government and the regulatory body, with Congress at the forefront.
Hindenburg Research’s Allegations
The controversy blew up over Hindenburg Research’s allegations that Madhabi Puri Buch and her husband had interests in some offshore funds, which were used for alleged illicit financial maneuvering on behalf of the Adani Group. The accusations fanned charges of conflict of interest within SEBI and have raised questions over the integrity of the regulator’s probe into the Adani Group.
Congress leader Jairam Ramesh said, “There is a strange reluctance on the part of SEBI to effectively deal with the Adani scam.” He said the failure to ensure compliance with provisions related to reporting on ultimate beneficial ownership in respect to foreign funds was noted earlier by the Expert Committee set up by the Supreme Court. According to Ramesh, SEBI had diluted these requirements in 2018 and later removed them in 2019. He claims this has severely hamstrung the regulator’s ability to detect wrongdoing.
Jairam Ramesh Criticizes Sebi’s Delayed Rule Reinstatement and Lack of Progress
He berated SEBI for its belatedly issued reinstatement of more stringent reporting rules, but then there was no resultant progress in actually investigating suspicious transactions. He cited frustration at the poor response to public and judicial scrutiny and encapsulated his sentiment with a Latin maxim: “Quis Custodiet Ipsos Custodes.”.
In a dramatic turn, Ramesh had also pointed to the abrupt adjournment of Parliament, which was originally due to sit till August 12 but was adjourned on August 9. He insinuated that pre-emption of the early adjournment could be connected to the controversy that was just unfolding.
SEBI Chief’s Alleged Involvement Represents Crony Capitalism
Trinamool Congress leader Mahua Moitra, a fierce critic of business tycoon Gautam Adani, reacted. She has also sharply criticized the involvement of SEBI’s chairman in the Adani Group, stating it epitomizes “crony capitalism.” Moitra has asked for a probe by the Central Bureau of Investigation and the Enforcement Directorate into allegations against the SEBI chief, besides pleading with the Supreme Court to revisit the scope of investigations.
Similar views were expressed by Shiv Sena UBT leader Priyanka Chaturvedi and spokesperson of Uddhav Thackeray, Anand Dubey. Dubey went a step further to raise the demand for an independent investigation, stating no faith in the parliamentary process.
Madhabi Puri Buch and Dhaval Buch Deny Hindenburg Claims as ‘Baseless’
Madhabi Puri Buch and her husband, Dhaval Buch, have issued a strong denial in connection with the allegations. They termed the Hindenburg Research claims as “baseless” and “devoid of any truth.” Quoted by NDTV Buch said in statement that, “In the context of allegations made in the Hindenburg Report dated August 10,2024 against us, we would like to state that we strongly deny the baseless allegations and insinuations made in the report.”
“The same are devoid of any truth. Our life and finances are an open book. 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, to any and every authority that may seek them. Further, in the interest of complete transparency, we would be issuing a detailed statement in due course,” statement added.
Statement concludes, “It is unfortunate that Hindenburg Research against whom SEBI has taken an Enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same. “