MUMBAI (Reuters) – U.S. short-seller Hindenburg Research alleged in a new report on Saturday that the chairman of India’s market regulator, Madhabi Puri Buch, previously held investments in some offshore funds that were also used by the Adani group.
Buch did not immediately respond to a call and a message sent on WhatsApp. The market regulator also did not immediately respond to an email seeking comment.
Citing whistleblower documents, Hindenburg said Buch and her husband held stakes in an offshore fund in which a substantial sum of money was invested by associates of Vinod Adani, brother of Gautam Adani, who is chairman of the Adani group of companies.
In January 2023, Hindenburg published a report exposing the Adani Group’s misuse of tax havens and stock market manipulation, triggering a $150 billion selloff in the conglomerate’s shares despite its denials of wrongdoing. The shares have since partially recovered.
The 2023 report also prompted an investigation by India’s stock market regulator, the Securities and Exchange Board of India (SEBI), which is still ongoing. In May, six Adani group companies disclosed that they had received notices from SEBI alleging violations of Indian stock market rules.
Along with the investigation into Adani Group, SEBI has sent a “show cause” notice to Hindenburg Research, alleging that the short seller violated the country’s rules by setting up a short bet using non-public information.
Hindenburg Research said the allegations were “absurd” in a note posted on its website in July, which also made public the regulator’s opinion.
In its latest report, Hindenburg attempts to establish a link between offshore funds that traded in Adani Group shares and the personal investments of Buch and her husband.
The Bermuda-based Global Opportunities Fund, which a Financial Times investigation found was used by entities linked to the Adani group to trade shares of group companies, is said to have sub-funds.
Buch and her husband were investors in one of those subfunds in 2015, Hindenburg said, citing whistleblower documents.
In 2017, before Buch was appointed as a full-time member, the second-highest position at the Securities and Exchange Board of India (SEBI), her husband asked to be the sole operator of the account, Hindenburg said, citing whistleblower documents.
Later in 2022, she was appointed to head the regulator.
“We believe our findings raise questions that deserve further investigation. We appreciate more transparency,” Hindenburg said.
(Reporting by Jayshree.P. Upadhyay and Ira Dugal in Mumbai; Editing by Alex Richardson and Christina Fincher)
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