Sebi Chief’s Response to Hindenburg Research Raises New Questions

MUMBAI, Aug 11 (Reuters) — The Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch's response to recent allegations by Hindenburg Research has ignited further scrutiny and questions. The U.S.-based research firm has highlighted several critical issues, suggesting significant conflicts of interest in the Sebi investigation into the Adani Group.

Hindenburg's Allegations and Buch's Response

Hindenburg Research, in a post on X, accused Sebi of a massive "conflict of interest," claiming that the investigation into investment funds related to the Adani matter involved funds personally invested in by Buch and funds highlighted in their report. They pointed out that Buch’s Indian consulting firm generated substantial revenue during her tenure as Sebi Chairperson. Hindenburg has also alleged that Buch used her personal email for business dealings under her husband’s name while serving as a Whole-Time Member of Sebi, questioning the full extent of her business engagements.

In response, Buch rejected these allegations as baseless and defended her and Sebi's impartiality. She reiterated Sebi’s commitment to transparency and provided additional details about their wealth, consultancy firms, and investments. Sebi emphasized that Blackstone, a significant investor in real estate, was on their 'recusal list,' meaning Buch was not involved in decisions impacting the firm.

360-One WAM’s Defense

360-One WAM, the asset management firm linked to Buch’s investments, denied allegations from Hindenburg that its IPE-Plus Fund 1 was used to inflate Adani Group stock prices. The firm clarified that the fund, which was registered in Mauritius, primarily focused on debt investments, with a substantial portion in bonds.

Political and Legal Reactions

The controversy has stirred political reactions, with Congress and other opposition parties demanding a Joint Parliamentary Committee (JPC) probe into the matter. They have also urged the Supreme Court to intervene, stressing the need to protect investors’ trust in Sebi amidst these allegations. Congress President Mallikarjun Kharge highlighted the importance of safeguarding the interests of small and medium investors in the stock market.