SEBI chairperson Madhabi Puri Buch has publicly acknowledged her investment in a little-known fund structure based in Bermuda/Mauritius, according to US short-seller Hindenburg Research, which has requested her to disclose all the clients her offshore Singaporean and Indian consulting firms worked with.
After Buch and her husband released a statement denouncing Hindenburg's recent criticism as an attempt to discredit SEBI and a "character assassination" endeavour, Hindenburg took to X to outline several significant admissions in their response, as well as pose numerous new critical questions.
"Buch's response now publicly confirms her investment in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani. She also confirmed the fund was run by a childhood friend of her husband, who was an Adani director at the time," it said.
Hindenburg alleged on Saturday that SEBI chairperson Madhabi Puri Buch and her husband had undisclosed investments in little-known offshore funds in Bermuda and Mauritius. These funds are believed to be the same used by Vinod Adani, the elder brother of group chairman Gautam Adani, to manipulate funds and artificially inflate stock prices.
In response, Buch and her husband Dhaval Buch stated in a joint statement on Sunday that the investments were made in 2015, well before Buch's appointment as a full-time member of SEBI in 2017 and her subsequent promotion to chairperson in March 2022. They clarified that the investments were made when they were "private citizens living in Singapore" and became inactive when Buch joined SEBI.
"SEBI was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms Buch WAS PERSONALLY INVESTED IN and funds by the same sponsor, which were specifically highlighted in our original report. This is obviously a massive conflict of interest," Hindenburg said.
As per Buch's statement, the two funds were invested in based on the advice of Dhaval's long-time friend, Anil Ahuja - the individual identified by Hindenburg on Saturday as the founder and Chief Investment Officer (CIO) of the Mauritius-based IPE Plus Fund. Additionally, the Adani group's statement on Sunday mentioned that Ahuja was a nominee of 3i Investment Fund in Adani Power (2007-2008) and had served as a director of Adani Enterprises for three terms, which lasted for nine years and ended in June 2017.
"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 list as of March 31, 2024, Agora Advisory Limited (India), is still 99 per cent owned by Madhabi Buch, not her husband. This entity is currently active and generating consulting revenue," Hindenburg said.
Also, according to Singaporean records, she remained a 100 per cent shareholder of Agora Partners Singapore until March 16, 2022, owning it during her entire tenure as a SEBI Whole-Time Member. "She only transferred her shares into her husband's name two weeks after her appointment as SEBI chairperson," it alleged.
Madhabi Puri Buch and her husband Dhaval Buch issued a joint statement on Sunday that strongly denied the "baseless allegations and insinuations made in the report," saying the charges were "devoid of any truth."
SEBI, too, defended its chairperson. A two-page statement said that Buch had made relevant disclosures from time to time and she "had also recused herself in matters involving potential conflicts of interest." Adani group too denied any commercial dealings with the SEBI head, while wealth management entity 360ONE - formerly called IIFL Wealth Management - separately said Buch and her husband Dhaval Buch's investment in IPE-Plus Fund 1 was less than 1.5 per cent of the total inflows and that it did not make any investments in Adani Group shares.
Hindenburg said the Singaporean consulting entity she set up doesn't publicly report its financials like revenue or profit and "so it's impossible to see how much money this entity has earned during her time at SEBI." "The Indian entity, still 99 per cent owned by the SEBI chairperson, has generated INR 23.985 million (U ~$312,000) in revenue (i.e. consulting) during the financial years ('22, '23, and '24), while she was serving as Chairperson, per its financial statements," it said.
Hindenburg cited whistleblower documents to state 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 with ties to Adani 'be registered solely in the name of Dhaval Buch', her husband, as per whistleblower documents. Despite disclaiming control, a private email she sent a year into her SEBI term shows she redeemed stakes in the funds through her husband's name, per the whistleblower documents. This raises the question: What other investments or business has the SEBI Chairperson engaged in through her husband's name while serving in an official capacity?" it asked.
According to Hindenburg, Buch's husband used the consulting entities starting in 2019 to transact with unnamed "prominent clients in the Indian industry."
"Do these include clients SEBI is tasked with regulating?" it asked.
"Buch's statement promised a 'commitment to complete transparency'. Given this, will she publicly release the full list of consulting clients and details of the engagements through the offshore Singaporean consulting firm, the Indian consulting firm and any other entity she or her husband may have an interest in?" Hindenburg asked.
It further asked, "Finally, will the SEBI Chairperson commit to a full, transparent, and public investigation into these issues?"
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