MUMBAI: US based short-seller Hindenburg Research in a new report released on Saturday alleged that the chairperson of India’s market regulator Madhabi Puri Buch previously held investments in certain offshore funds that were also used by Adani Group.
In a late night press statement, Buch denied these allegations and called them baseless, adding that a detailed statement would be issued later. Hindenburg’s report sparked fresh criticism from India’s opposition political parties who demanded a parliamentary probe.
Citing whistleblower documents, Hindenburg said Buch and her husband held stakes in an offshore fund where a substantial amount of money was invested by associates of Vinod Adani, brother of Gautam Adani, who is chairman of Adani Group.
Adani Group on Sunday rejected the allegations and said their overseas holding structure was fully transparent.
The conglomerate’s spokesperson said in a statement that it rejects these allegations, describing them as “no more than red herrings thrown by a desperate entity with total contempt for Indian laws”.
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“Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing,” the spokesperson said.
In January 2023, Hindenburg released a report alleging improper use of tax havens and stock manipulation by Adani Group, setting off a $150 billion sell-off in the conglomerate’s stocks despite its denials of wrongdoing. The stocks have since partially recovered.
The 2023 report also led to an enquiry by the country’s market regulator, the Securities and Exchange Board of India (SEBI), which is still underway.
In May, six Adani Group companies disclosed they had received notices from SEBI alleging violation of Indian stock market rules. Alongside the enquiry into Adani Group, SEBI sent a “show cause” notice to Hindenburg Research alleging that the short-seller violated the country’s rules by setting up a short-bet using non-public information.
Hindenburg Research said these allegations were “nonsense” in a note published on its website in July, which also made public the regulator’s notice. In its latest report, Hindenburg attempts to draw a link between offshore funds that traded in Adani Group shares and personal investments of Buch and her husband.
It says that Bermuda-based Global Opportunities Fund, which according to a Financial Times investigation was used by entities connected to Adani Group to trade in the shares of group companies, had sub-funds.
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