In its latest expose, US-based short seller Hindenburg Research has alleged that Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and her husband Dhaval Buch had hidden stakes in offshore entities, located in Bermuda and Mauritius, linked to stock price manipulation and money laundering by the Adani Group.
The money siphoning allegations were published by Hindenburg in a report in January 2023, which stated that Adani “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.” Hindenburg called out the conglomerate’s “substantial debt”, which includes pledging shares for loans; Gautam Adani’s brother Vinod managing “a vast labyrinth of offshore shell entities” that move billions into group companies without required disclosure; and that its auditor “hardly seems capable of complex audit work”.
In its August 10 release, Hindenburg Research said that whistleblower documents show SEBI Madhabi Buch and her husband had stakes in “a multi-layered offshore fund structure with miniscule 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 syphoning scandal.”
Hindenburg Research said that it suspects SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may be due to Madhabi Buch’s stakes in the exact same funds used by Vinod Adani. An expert panel constituted by the Supreme Court of India had found that SEBI’s investigation into the Adani scam case could be a “journey without a destination” and that the regulatory body had drawn a blank.
According to Hindenburg, the SEBI chairperson and her husband invested in the same funds that a Vinod Adani-controlled company had invested in Bermuda and Mauritius. Vinod Adani invested in the Global Dynamic Opportunities Fund in Bermuda, an offshore tax haven. This entity then invested in IPE Plus Fund 1, a fund registered in Mauritius, another tax haven. IPE Plus Fund 1 then invested money in the Indian financial markets. “Madhabi Buch and her husband Dhaval Buch seem to have opened their account with IPE Plus Fund 1 on June 5, 2015 in Singapore, as per whistleblower documents. The source of the investment was seen as the “salary” and the couple’s net worth was estimated at $10 million. On March 22, 2017, weeks before Madhabi Buch joined SEBI as a full-time member, Dhaval Buch wrote to a Mauritius fund administrator requesting to “be the sole person authorised to operate the Accounts, seemingly moving the assets out of his wife’s name ahead of the politically sensitive appointment,” Hindenburg Research said.
Hindenburg additionally said that during Madhabi Buch’s tenure as whole time member and Chairperson at SEBI from April 2017 to March 2022, she had a 100% interest in Agora Partners, which describes itself as a “business and management consultancy.” The offshore Singaporean entity is exempt from disclosing financial statements.
Hindenburg also alleged that Dhaval Buch was appointed as a Senior Advisor to Blackstone, an American company known for real estate investment partnerships, in 2019, during Madhabi Buch’s tenure as a full-time member at SEBI. Blackstone is said to have benefited significantly from Madhabi Buch’s open support for REITs (Real estate investment trusts), after it sponsored Mindspace and Nexus Select Trust, India’s second and fourth REIT respectively.