In a shocking turn of events, Hindenburg Research has leveled serious allegations against the Chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, and her husband Dhaval Buch. The US-based short-seller claims that the couple had hidden stakes in offshore funds linked to the Adani Group's alleged market manipulation scandal.
The Biggest Corporate Scandal of the Decade?
Hindenburg's latest report has sent shockwaves through the Indian corporate landscape, wiping out a staggering $153 billion from Adani Group's market value. The short-seller has been adamant about exposing what it calls the "largest con in corporate history," accusing the Adani Group of inflating its market value by $218 billion through stock manipulation.
Hindenburg: The Snitch Of Stock Markets
Hindenburg's clash with the Adani Group began on January 24, 2023, when the short-seller released a report alleging financial irregularities within the conglomerate. The report led to the cancellation of Adani's ₹20,000 Cr share offer, causing Gautam Adani to drop from the world's second-richest person to the 21st. However, the Adani Group has since bounced back, with GQG Partners investing ₹15,500 Cr in March 2023, signaling confidence in the company.
Hindenburg's "Adani Money Siphoning Scandal" Didn't Stop There
As the Adani Group started to recover, Hindenburg resumed its "character assassination" of the company. On July 2, 2024, they accused SEBI of regulatory breaches, and on August 10, they made a cryptic post on X, hinting at a possible new India-centric report. The short-seller then revealed that SEBI Chairperson Madhabi Puri Buch and her husband had stakes in offshore funds in Bermuda and Mauritius that were allegedly tied to Vinod Adani, Gautam Adani's brother, and linked to fraud and stock manipulation.
The Accusations are now Stronger Than Ever
Hindenburg's latest report makes several strong accusations against Madhabi Puri Buch and her husband:
- Conflict of Interest: Allegations of Madhabi Puri Buch's financial ties to offshore funds linked to Adani.
- Consulting Firms: Concerns over Buch's active consulting firms generating revenue during her SEBI tenure.
- Personal Email Use: Claims that Buch used her personal email for business deals under her husband's name.
- Demand for Transparency: Calls for Buch to disclose consulting clients and engage in a transparent investigation.
Are the Adanis and Buch Families Linked in Any Way?
The Adani Group has denied any commercial relationship with the Buch family, calling the allegations a "red herring". However, reports suggest that Madhabi and her husband had invested in offshore entities that were allegedly part of a fund structure managed by India Infoline, in which Vinod Adani also had investments.
The Allegations as "Baseless"
Madhabi Puri Buch has clarified that her investments were made before she became SEBI chief, fully disclosed, and compliant. She confirmed that her IPE-Plus Fund 1 hasn't invested in Adani Group shares. Meanwhile, the Adani Group has slammed Hindenburg's report as "malicious" and from a "discredited short-seller". Hindenburg, on the other hand, claims that they are merely making $4 million from the $153 billion Adani selloff.
What is the Opposition Saying?
The opposition has been quick to seize on the allegations. Rahul Gandhi warns that SEBI's credibility is on the line, with "PM's integrity torn to pieces" amid serious allegations. He took to X, demanding answers and accountability from the government and SEBI. BJP's Ravi Shankar Prasad, however, claims that George Soros is behind the report to destabilize India's economy.
Undoubtedly, Adanis Paid the Price
On August 12th, Adani Group shares tumbled, with Adani Enterprises down 4.10% to ₹3,054.50 and Adani Ports falling 2.44% to ₹1,496.75. Adani Green Energy took the biggest hit, dropping to ₹1,656. Indian mutual funds have ₹41,814 crore invested in Adani companies, with early losses totaling $8.2 billion. The Supreme Court has now extended SEBI's probe to August 14th, with a verdict expected in November.
The Adani Group has fired back at Hindenburg, describing the allegations as a "malicious, mischievous, and manipulative selection of publicly available information". They claim the allegations have already been debunked by the Supreme Court and accused Hindenburg of being a "discredited short-seller". The government also sees the latest Hindenburg report as a calculated move to destroy India's primary and secondary market by attacking the regulator's credibility.
As the battle between Hindenburg, Adani, and SEBI rages on, the future of India's corporate landscape hangs in the balance. With the Supreme Court's verdict expected in November, the world waits with bated breath to see who will emerge victorious in this clash of titans.
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