HINDENBURG II
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On August 11, 2024, Hindenburg Research released a report targeting the SEBI chief, Madhabi Puri Buch, and her husband, alleging conflicts of interest and questionable financial dealings linked to offshore entities associated with the Adani Group. The report claims that the SEBI chief and her husband had stakes in offshore funds used in the Adani money siphoning scandal, suggesting a conflict of interest in the ongoing investigation into the Adani Group (B&F News) (The New Indian Express).
In response, Madhabi Puri Buch and her husband strongly denied the allegations, labeling them as baseless and a form of character assassination. They asserted that their finances are transparent and all required disclosures have been made. They also mentioned that this attack seems to be a retaliation for the enforcement actions taken by SEBI against Hindenburg (India Today).
The report has sparked political reactions in India, with the Communist Party of India (CPI) and other left parties demanding Buch's resignation and calling for a Joint Parliamentary Committee to investigate the matter impartially (The New Indian).
Adani group calls Hindenburg's allegations 'malicious'; Buch says attempt at 'character assassination'
The Communist Party of India (CPI) general secretary D Raja said that Hindenburg revelations show a conflict of interest, and the SEBI chief must step down for an impartial probe into alleged wrongdoings. They have also demanded a Joint Parliamentary Committee (JPC) investigation for an impartial probe.
“The Hindenburg Research Group, which had raised serious allegations of business malpractices and corporate scams involving the Adani Group, has now alleged that the current Chairperson of SEBI Madhabi Buch and her spouse have business interests in one of the entity involved in the murky deals of the Adani Group. While SEBI is the agency probing charges against Adani, with no success, its chairperson having a stake in the allegedly corrupt entities raises a crucial question of conflict of interests” Raja said.
KV Subramanian, a former Chief Economic Advisor of India, took to X and said that he vouched for the 'unimpeachable integrity' of SEBI chief Madhabi Puri Buch and that the Hindenburg report lacked 'intellectual rigour'.
"I've personally known SEBI Chairperson Madhabi for about two decades. Given her unimpeachable integrity and her intellectual prowess, I'm sure she will shred to smithereens this Hindenberg's hit job," wrote Subramanian, who is currently Executive Director with IMF.
K
ishore Subramanian, a leading financial expert, said that
the report looks devoid of any evidence and banks on accusations and allegations to prove its point.
“The use of words like... 'we think, maybe' shows that the report is based on conjectures and speculations and not on solid evidence,” he said.
“By releasing a report bereft of truth, Hindenburg has delivered yet another hit job. The claims are unsubstantiated and will remain untenable in the court of law,” he added.
He also said that the motive of a US-based short-seller is to create commotion and disturbance in Indian markets and benefit itself financially as it did in previous instances.
“There appears only one aim of Hindenburg -- is to spread fear and panic among investors with its smear campaign. It wants to trigger freefall in stock markets, destabilise the economy and in turn make money,” the financial expert said.
He further urged investors not to believe in hearsay, as spread by the US-based short-seller and asked people to frame their own opinion by reading the report which is in the public domain.
Ajay Rotti, Tax Compass founder, also saw an underlying motive in the report and said that it was a brazen attempt to bring the Indian markets down.
“This report has been published just to divert attention from the scrutiny of Hindenburg themselves and their short trade.... the report calls the SEBI show-cause to them as "apparent show cause notice". Their earlier report had no impact on the markets after the initial fall... the Supreme Court found nothing wrong in the previous allegation in 2023. Hence, another attempt to make money while shorting!” he wrote.
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