"Buch’s Response Confirms Her Investment In Obscure Fund": Hindenburg Responds
Hindenburg Research has once again turned its attention to the Adani Group, bringing forth fresh and explosive allegations that have now widened to include the Securities and Exchange Board of India (SEBI) and its Chairperson, Madhabi Buch. These new claims follow Hindenburg’s earlier report, published 18 months ago, which labelled the Adani Group’s operations as “the largest con in corporate history.” The research firm now alleges a conflict of interest within SEBI, pointing directly at Buch and her husband, Dhaval Buch, accusing them of holding stakes in offshore funds allegedly linked to the Adani Group’s purported money-laundering activities.
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In its latest report, Hindenburg details that the Buchs invested in IPE Plus Fund 1, an obscure offshore fund registered in Mauritius. According to the research firm, this fund is part of a complex financial structure involving entities controlled by Vinod Adani, the brother of Adani Group founder Gautam Adani. These entities are alleged to have funneled money through offshore accounts via over-invoicing of power equipment. The Buchs’ connection to this fund, Hindenburg claims, is a clear indication of a deep-seated conflict of interest, especially considering SEBI’s role in regulating the very industry where these investments were made.
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Hindenburg’s report is based on whistleblower documents that reveal Madhabi Buch opened an account with IPE Plus Fund 1 in Singapore in June 2015, two years before her appointment as a Whole-Time Member of SEBI. Before her SEBI appointment, her husband requested that the fund administrator transfer all assets under his sole control, which Hindenburg interprets as an attempt to distance Madhabi Buch from these holdings before assuming her regulatory role. The research firm argues that this move raises serious questions about potential conflicts of interest, given SEBI’s oversight of the financial sector.
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In response to these allegations, Madhabi Buch and her husband released a statement addressing the claims made by Hindenburg. The Buchs strongly refuted the accusations, describing them as “malicious and motivated.” They clarified that the investments in question were made in 2015, when both were private citizens living in Singapore, and nearly two years before Madhabi joined SEBI. They emphasised that the investment decision was driven by Dhaval’s long-standing friendship with Anil Ahuja, the Chief Investment Officer of the fund, who they described as having a credible career in investing. The Buchs further stated that they redeemed their investment in 2018, following Ahuja’s departure from the fund, and that the fund never invested in any Adani Group securities.
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However, Hindenburg quickly issued a rebuttal, emphasising that Madhabi Buch’s response to their report included several critical admissions and raised new questions. The firm stated that Buch’s response publicly confirmed her investment in what they described as “an obscure Bermuda/Mauritius fund structure,” alongside money allegedly siphoned by Vinod Adani. They pointed out that this fund was managed by a childhood friend of Dhaval Buch, who, at the time, was an Adani director.
Buch’s statement also claims that the two consulting companies she set up, including the Indian entity and the opaque Singaporean entity “became immediately dormant on her appointment with SEBI” in 2017, with her husband taking over starting in 2019.
Per its latest shareholding… pic.twitter.com/gh7jS3zJKZ
— Hindenburg Research (@HindenburgRes) August 11, 2024
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Hindenburg argued that SEBI, under Buch’s leadership, was responsible for investigating investment funds related to the Adani matter, including funds in which Buch herself was allegedly invested. The firm stated, “This is obviously a massive conflict of interest,” questioning the integrity of the regulatory processes within SEBI.
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The research firm also took issue with Buch’s claims regarding her consultancy firms. While Buch stated that the two companies she set up, one in India and one in Singapore, became dormant upon her appointment to SEBI in 2017, Hindenburg highlighted that per the latest shareholding list as of March 31, 2024, Buch still owns a 99% stake in Agora Advisory Private Limited, the Indian entity, which is reportedly still active and generating consulting revenue. The firm pointed out that this entity has earned significant consulting revenue while Buch has been serving as SEBI Chairperson, raising further questions about potential conflicts of interest.
The Singaporean consulting entity she set up doesn’t publicly report its financials like revenue or profit so it’s impossible to see how much money this entity has earned during her time at SEBI.
The Indian entity, still 99% owned by the SEBI Chairperson, has generated INR… pic.twitter.com/NXQkOsSkgD
— Hindenburg Research (@HindenburgRes) August 11, 2024
Read also: Dhaval Buch Who Has Been Named In Latest Hindenburg Report
Hindenburg also referenced whistleblower documents suggesting that Buch used her personal email to conduct business under her husband’s name while serving as a Whole-Time Member of SEBI. They highlighted that just weeks before her SEBI appointment, Buch allegedly ensured that accounts with ties to Adani were registered solely in her husband’s name. Hindenburg questioned what other investments or business activities Buch may have engaged in through her husband’s name while serving in an official capacity.
This is especially important given whistleblower documents showing that Buch used her personal email to do business using her husband’s name while serving as a Whole Time Member of SEBI.
In 2017, weeks ahead of her appointment as SEBI Whole Time Member, she ensured the accounts… pic.twitter.com/zeGWoUDC5A
— Hindenburg Research (@HindenburgRes) August 11, 2024
Read also: “Character Assassination”: Madhabi, Dhaval Respond to Hindenburg Report
The firm further challenged Buch’s statement that her husband’s consulting work, which began in 2019, involved prominent clients in the Indian industry. Hindenburg questioned whether any of these clients were entities that SEBI is tasked with regulating, calling for full transparency.
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Hindenburg concluded their response by urging Buch to fulfil her stated “commitment to complete transparency” by publicly releasing a full list of consulting clients and details of the engagements conducted through both the offshore Singaporean firm, the Indian firm, and any other entities she or her husband may have an interest in. The firm also called for a full, transparent, and public investigation into these issues, stating that anything less would undermine the credibility of SEBI and its leadership.
