In the continuing saga on the Adani-Hindenburg report, the US-based research firm Saturday alleged that “it suspects SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from Sebi Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani.”
To date, SEBI has taken no action against other suspect Adani shareholders operated by India Infoline: EM Resurgent Fund and Emerging India Focus Funds, the US firm alleged.
In January last year, Hindenburg Research released a report alleging that the Gautam Adani-led group had indulged in stock manipulation and account- ing fraud, which the port-to- energy conglomerate had denied.
In July this year, Hindenburg said that it received a ‘show cause notice’ from Sebi for trading in shares of Adani Enterprises Ltd (AEL) immediately prior and post the release of its report on the Adani Group in January 2023. On March 22, 2017, just weeks ahead of that politically sensitive appointment (as Sebi Whole Time Member), Madhabi’s husband, Dhaval Buch, wrote to Mauritius fund administrator Trident Trust, according to documents Hindenburg received from a whistleblower.
The email was regarding his and his wife’s investment in the Global Dynamic Opportunities Fund (GDOF), the US firm alleged.
“In the letter, Dhaval Buch requested to ‘be the sole per- son authorised to operate the Accounts’, seemingly moving the assets out of his wife’s name ahead of the politically sensitive oint- ment,” Hindenburg alleged.
“In a later account state- ment dated February 26, 2018, addressed to Madhabi Buch’s private email, the full details of the structure are revealed: “GDOF Cell 90 (IPEplus Fund 1)”.
Again, this is the exact same Mauritius-registered “cell” of the fund, found several lay- ers deep in a convoluted structure, reportedly used by Vinod Adani,” the firm alleged.The total value of Buch’s stake was worth US $872,762.25 at the time, Hindenburg said.
“Our concerns were further corroborated by an investigation by the Financial Times, which found a ‘secret paper trail’ at EM Resurgent and Emerging India Focus Funds. The investigation raised questions whether Adani used business associates as ‘front men’ to ‘bypass rules for Indian companies that prevent share price manipulation’,” Hindenburg alleged.
“If SEBI really wanted to find the offshore fund hold- ers, perhaps the SEBI Chairperson could have started by looking in the mir- ror,” Hindenburg alleged. In response to requests from the Indian Supreme Court to investigate the Adani matter, SEBI was said to have hit a wall unveiling the holders of the offshore funds.
The Supreme Court said that while SEBI seemingly agreed with our concerns over who funded Adani’s offshore shareholders, “it is evident that SEBI has drawn a blank in this investigation”, the firm alleged.