New Delhi:

In the Centre’s first reaction to the latest report released by Hindenburg Research, Union Minister Kiren Rijiju has said that the Congress and some of its allies want to destroy the country. The principal opposition party and others, he said, could not win the elections and are now aligning with anti-India forces.

On Saturday, Hindenburg Research, which is a US-based short-seller, released a report claiming that Securities Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and her husband, Dhaval, had a stake in offshore entities used in alleged financial wrongdoing by the Adani Group.

When he was asked about the report and the allegations made by the Congress, Mr Rijiju said on Monday, “We have to understand that there are many forces, both inside and outside the country, who are against India and work against it. We have to recognise them. The people who are playing games to hurt India’s ascent as an economic power… I feel that the Congress and some of its allies want to destroy the country. They could not defeat Prime Minister Narendra Modi because the country is standing with him.”

“Elections have taken place and a new government has been formed under PM Modi. They could not win the elections and they are working with anti-India forces to ensure that India suffers a loss. They will never be successful because the people of India have realised who the anti-India forces are,” Mr Rijiju, who holds the Minority Affairs and Parliamentary Affairs portfolios, added. 

Earlier on Monday, BJP leader Ravi Shankar Prasad took a similar stance and said the Congress is involved in creating economic instability and anarchy against India.

“After losing (the Lok Sabha elections) for a third time, the Congress and its closest ‘toolkit’ allies now want to make the Indian economy unstable. Congress today has developed hatred against India. What Congress wants is to bring back ‘control Raj'” Mr Prasad said.

The BJP leader also stressed that India is a safe, stable and promising market. 

‘Character Assassination’

Madhabi and Dhaval Buch have accused Hindenburg Research of attempting a character assassination of the SEBI chairperson.

“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 SEBI and attempt character assassination of the SEBI Chairperson,” the couple said in a statement. 

The Adani Group has also said Hindenburg Research has made “recycled claims”.

“For a discredited short-seller under the scanner for several violations of Indian securities laws, Hindenburg’s allegations are no more than red herrings thrown by a desperate entity with total contempt for Indian laws,” the group said in an exchange filing.

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)

Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI). File
| Photo Credit: PTI

Hours after the stock market regulator’s chairperson Madhabi Puri Buch, and her spouse Dhaval Buch, issued a clarification on a Hindenburg Research report red-flagging their investments in obscure offshore funds linked to the Adani group, and ownership of consulting firms, the U.S.-based short seller said their rebuttal contains important ‘admissions’, raises fresh questions and confirms a ‘massive conflict of interest’.

“Buch’s response now publicly confirms her investment in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani. She also confirmed the fund was run by a childhood friend of her husband, who at the time was an Adani director. SEBI [Securities Exchange Board of India] was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms. Buch was personally invested in and funds by the same sponsor which were specifically highlighted in our original report,” the firm said, stressing this was “obviously a massive conflict of interest”.

On the two consulting firms, Singapore-registered Agora Partners and India-based Agora Advisory, that Ms. Buch had set up before joining SEBI and were referred to in Hindenburg’s report, the SEBI chief and her spouse said these firms “became immediately dormant on her appointment with SEBI” and were used by her husband after he retired in 2019 for his own “consultancy practice”. The statement from Mr. Buch and Ms. Buch also said her shareholding in the Singapore entity had been transferred to him.

Hindenburg countered that Ms. Buch remained a 100% shareholder of Agora Partners Singapore until March 16, 2022, as per Singaporean records, owning it during her entire time as a Whole Time Member of SEBI. “She only transferred her shares into her husband’s name two weeks after her appointment as SEBI Chairperson,” the firm pointed out, adding that it is “impossible to see how much money this entity has earned during her time at SEBI” as it doesn’t publicly report its financials.

Also Read | Adani case: Supreme Court had said it can transfer probe if bias found

However, Ms. Buch continued to hold 99% of the shareholding in the India-based consulting firm as of March 31, 2024. Noting that the Indian entity is “currently active”, Hindenburg said it has “generated ₹23.985 million (~$312,000) in revenue during the financial years (‘22, ‘23, and ‘24), while she was serving as Chairperson, per its financial statements”.

On Ms. Buch’s remarks that her husband used the consulting entities since 2019 to transact with unnamed “prominent clients in the Indian industry”, Hindenburg asked if these included clients SEBI is tasked with regulating.

“This is especially important given whistleblower documents showing that Buch used her personal email to do business using her husband’s name while serving as a Whole Time Member of SEBI. In 2017, weeks ahead of her appointment as SEBI Whole Time Member, she ensured the accounts with ties to Adani “be registered solely in the name of Dhaval Buch”, her husband, per whistleblower documents,” it said in a response posted on X.

“Despite disclaiming control, a private email she sent a year into her SEBI term shows she redeemed stakes in the funds through her husband’s name, per the whistleblower documents. This raises the question: What other investments or business has the SEBI Chairperson engaged in through her husband’s name while serving in an official capacity?”, Hindenburg Research asked.

With the joint statement from the SEBI chief and her spouse promising a “commitment to complete transparency”, Hindenburg asked if she will “publicly release the full list of consulting clients and details of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm and any other entity she or her husband may have an interest in”. “Finally, will the SEBI Chairperson commit to a full, transparent and public investigation into these issues?”, it concluded.

SEBI chief Madhabi Puri Buch at SEBI Bhavan in Mumbai.
| Photo Credit: PTI

In its first comments following a new report by U.S.-based short seller Hindenburg Research, capital markets regulator SEBI on Sunday (August 11, 2024) said it has investigated all the allegations against the Adani group.

Chairperson Madhabi Buch made relevant disclosures from time to time and recused herself in matters involving potential conflicts of interest, the regulator said in a statement.

The regulator also said that it has duly investigated the allegations made by Hindenburg against Adani, and said that last of its 26 investigations is nearing completion now.

Earlier, Ms. Buch and her husband Dhaval Buch had termed the allegations baseless, and also said that the short-seller is attacking the credibility of the capital markets regulator, and also attempting a character assassination of the chairperson.

Hindenburg Research alleged that it suspects SEBI’s unwillingness to act against Adani group may be because Ms. Madhabi Buch had stakes in offshore funds linked to the conglomerate.