Hindenburg Vs Adani Saga: Does Sebi Chairperson's Role Hint At Potential Rules Violation?

Hindenburg Vs Adani Saga: Sebi Chairperson Madhabi Puri Buch continued to earn revenue from a consultancy firm during her seven-year tenure, potentially breaching rules for regulatory officials, according to public documents reviewed by Reuters. Buch's holdings potentially violate a 2008 Sebi policy that prohibits officials from holding an office of profit or receiving salary or professional fees from other professional activities.

Allegations by US-Based Short Seller

The matter relates to allegations made by US-based short seller Hindenburg Research last week, claiming that Buch and her husband, Dhaval Buch, previously held investments in offshore funds also used by the Adani Group. These charges, suggesting a conflict of interest in her investigations surrounding the conglomerate, were categorically denied by the couple.

Buchs' Response to Hindenburg's Allegations

Immediate and Detailed Statements Deny Allegations

After denying the charges in an immediate response to Hindenburg's report, the Buchs released a second, more detailed statement, categorically denying the allegations and sharing specific details, including their career history, education, and certain investments. They accused Hindenburg of attempting to attack Sebi's credibility and indulging in character assassination.

Hindenburg's Reaction to the Buchs’ Statement

In response to the Buchs’ 15-point statement, Hindenburg took to the microblogging site X (formerly Twitter) to claim that the Buchs' responses included "several important admissions” and raised “numerous new critical questions."

Market Reactions and Expert Opinions

Foreign Investors and Experts Express Concerns

Several foreign investors have raised concerns regarding the latest Hindenburg report. Eminent market expert Mark Matthews stated he would wait for the Supreme Court's opinion, while veteran investor Marc Faber suggested that those involved should resign if the allegations are proven true.

Adani Group's Denial and SEBI's Advisory

In its report, Hindenburg alleged that the Buchs held stakes in an offshore fund where substantial investments were made by associates of Vinod Adani. The Adani Group has denied these accusations. Capital market regulator Sebi has advised investors to remain calm and exercise due diligence before reacting to such reports.

AMFI Backs SEBI Chairperson

The Mutual Fund industry body, AMFI, has voiced support for the Sebi chairperson, stating that the US short-seller is trying to create a trust deficit in the market ecosystem. (Note: This story is sourced from ZeeBiz.com.)