New Delhi: Under fire over possible conflict of interest in dealing with allegations about malfeasance and irregularities in the Adani Group case, Madhabi Puri Buch and spouse, Dhaval Buch have not denied the controversial off-shore fund investments referred to in the second set of Hindenburg Research’s allegations of August 10. They have said investments were made as “private citizens living in Singapore”
“The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member. The decision to invest in this fund was because the Chief Investment Officer, Anil Ahuja, is Dhaval’s childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, JP Morgan and 3i Group plc, had many decades of strong investing career. 1. As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company…”
But serious questions arising from the latest disclosures over possible conflict of interest that the market regulator may have had on the Adani matter refuse to die down and the stock market regulator’s credibility continues to take a hit.
Anil Ahuja was director with Adani Enterprises: Mahua Moitra
Opposition MP Mahua Mitra has raised serious questions arising from the Buchs’ statement.
“You conveniently fail to mention that Anil Ahuja was a director with Adani Enterprises / Adani Power & this very fund was used by Vinod Adani to siphon off monies,” said Moitra.
Mitra goes onto say that “Mr. Ahujas’s statement has no sanctity unless you can confirm that the entire entity GDOF didn’t have any connection with the Adanis. Further, who will verify Mr. Ahuja’s statement as you yourself claim you can’t get details.” Mitra has asked if they informed Supreme Court committee “that you were a participant in GDOF who had an entity that was to be investigated?” She has asked the SEBI chairperson “what was your agenda of meeting Gautam Adani twice as Chairperson one on one.”
This is a clear cut admission by Chairperson of @SEBI_India.
1 – You did invest in the fund. You conveniently fail to mention that Anil Ahuja was a director with Adani Enterprises / Adani Power & this very fund was used by Vinod Adani to siphon off monies.
2 – Mr. Ahujas’s… pic.twitter.com/pdhH9WSAhu— Mahua Moitra (@MahuaMoitra) August 11, 2024
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The Buch couple’s statement says that SEBI would be making an independent statement and the two-page statement made on Sunday (August 11) evening was in their personal capacity. Madhabi and Dhaval Buch have said “”Hindenburg has been served a show cause notice for a variety of violations in India. It is unfortunate that instead of replying to the show cause notice, they have chosen to attack the credibility of the SEBI and attempt character assassination of the SEBI Chairperson.
They have also tried to defend themselves on investments in Agora Partners and on Dhaval Buch’s appointment in Blackstone, which they maintain was not linked to Madhabi Buch being appointed SEBI chairperson.
360 ONE Asset Management formerly known as IIFL Wealth Management Ltd, the asset management company that launched the offshore fund IPE-Plus Fund 1, stated that the fund has never made any investment in Adani Group shares.
Hindenburg had alleged that “despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry she now is responsible for regulating, documents in its possession show Madhabi Buch and her husband “had stakes in a multi-layered offshore fund structure with minuscule assets, traversing known high-risk jurisdictions, overseen by a company with reported ties to the Wirecard scandal, in the same entity run by an Adani director and significantly used by Vinod Adani in the alleged Adani cash siphoning scandal.”
Rahul Gandhi says allegations have compromised integrity of SEBI
Lok Sabha Leader of Opposition Rahul Gandhi on Sunday (August 11) said that the integrity of SEBI has been gravely compromised by the allegations against its Chairperson.
“Honest investors across the country have pressing questions for the government: – Why hasn’t SEBI Chairperson Madhabi Puri Buch resigned yet? – If investors lose their hard-earned money, who will be held accountable—PM Modi, the SEBI Chairperson, or Gautam Adani?” Gandhi Posted on X.
The integrity of SEBI, the securities regulator entrusted with safeguarding the wealth of small retail investors, has been gravely compromised by the allegations against its Chairperson.
Honest investors across the country have pressing questions for the government:
– Why… pic.twitter.com/vZlEl8Qb4b
— Rahul Gandhi (@RahulGandhi) August 11, 2024
“In light of the new and very serious allegations that have surfaced, will the Supreme Court look into this matter suo moto once again? It is now abundantly clear why Prime Minister Modi is so afraid of a JPC probe and what it might reveal,” Gandhi added.
SEBI urges investors to ‘remain calm’
The Securities and Exchange Board of India (SEBI) has urged investors to remain “calm” before reacting to the Hindenburg Research report.”
“Investors should remain calm and exercise due diligence before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report,” SEBI has said in a statement.
SEBI says “the allegations made by Hindenburg Research, against the Adani Group, have been duly investigated by SEBI.”
It adds that the Supreme Court in its order has noted that SEBI has completed the investigations in 22 out of 24 cases.
The release maintains that SEBI chairperson in the eye of the storm has recused herself in matters involving conflicts of rule.
“it is emphasized that SEBI has adequate internal mechanisms for addressing issues relating to conflict of interest, which include disclosure framework and provision for recusal. It is noted that relevant disclosures required in terms of holdings of securities and their transfers have been made by the Chairperson from time to time. Chairperson has also recused herself in matters involving potential conflicts of interest.”
