In today’s trading, Adani Group stocks fell sharply following significant accusations made against SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, by US-based short seller Hindenburg.
The claims caused only minor drops in the Adani Group equities, therefore the market did not react aggressively to them. The market’s reaction to Hindenburg’s initial accusations against the Adani Group in January 2023, which caused a substantial loss of USD 150 billion in market value across the conglomerate’s 10 listed firms at their lowest point, stands in stark contrast to this.
In a swift response, the Adani Group and SEBI rejected the allegations as unfounded. Furthermore, investors have assiduously reviewed Hindenburg’s most recent analysis, which was made public over the weekend. Industry insiders have refuted these accusations, which were made in an attempt to sway the Indian financial markets.
Ten group stocks have losses of up to 5% as of the time this report was written. Adani Total Gas is the stock with the biggest loss, down 4.9%. Other group stocks that have losses range from 1% to 3.25%, including Adani Enterprises, Adani Power, Adani Green Energy, Adani Energy Solutions, Adani Wilmar, Adani Ports & SEZ, ACC, Ambuja Cements, and NDTV.
Hindenburg had earlier released a study in which it was claimed that the Adani Group was running “the largest con in corporate history.” A network of offshore shell companies, primarily based in Mauritius, was exposed by the research as being utilized for stock manipulation and hidden related-party activities. Hindenburg condemns SEBI’s lack of public action against the Adani Group in light of strong evidence, claiming that this is a failure to impose regulatory control.
While acknowledging the facts in Hindenburg’s first analysis, SEBI claimed that Hindenburg’s disclosure regarding its short position was inadequate and sent a “show cause” notice to the company in June 2024. SEBI further branded Hindenburg’s report as “reckless” due to its citation of a barred broker who said SEBI was aware of and involved in schemes such as the Adani controversy.
Allegations of SEBI Complicity: According to Hindenburg, there may be a reason behind SEBI’s unwillingness to take action against the Adani Group: Madhabi Buch, the organization’s head, may be involved.
“We had previously noted Adani’s total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani’s relationship with SEBI Chairperson, Madhabi Buch,” said Hindenburg.
According to the report, Madhabi and Dhaval Buch had made investments in Vinod Adani’s offshore companies, the Global Dynamic Opportunities Fund (GDOF) and the IPE Plus Fund.
According to Hindenburg, these investments were purportedly made just before Madhabi Buch was appointed as a full-time member of SEBI in April 2017. Additionally, it asserts that Dhaval Buch removed the assets from his wife’s name before her appointment to evade investigation.
According to the report, Madhabi and Dhaval Buch had made investments in Vinod Adani’s offshore companies, the Global Dynamic Opportunities Fund (GDOF) and the IPE Plus Fund.
According to Hindenburg, these investments were purportedly made just before Madhabi Buch was appointed as a full-time member of SEBI in April 2017. Additionally, it asserts that Dhaval Buch removed the assets from his wife’s name before her appointment to evade investigation.
Hindenburg’s study delves deeper into the relationships between offshore money and Buchs. It draws attention to the fact that the Buchs’ investment vehicle, the IPE Plus Fund, was a component of a complex offshore fund structure overseen by India Infoline (now 360 One), a company connected to the Wirecard fraud.
Strong counter to allegations
According to the report, Madhabi and Dhaval Buch had made investments in Vinod Adani’s offshore companies, the Global Dynamic Opportunities Fund (GDOF) and the IPE Plus Fund.
According to Hindenburg, these investments were purportedly made just before Madhabi Buch was appointed as a full-time member of SEBI in April 2017. Additionally, it asserts that Dhaval Buch removed the assets from his wife’s name before her appointment to evade investigation.
Hindenburg’s study delves deeper into the relationships between offshore money and Buchs. It draws attention to the fact that the Buchs’ investment vehicle, the IPE Plus Fund, was a component of a complex offshore fund structure overseen by India Infoline (now 360 One), a company connected to the Wirecard fraud.
In a thorough reaction to the latest accusations, SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch released a statement on Sunday. It was made clear by them that they had invested in the IPE Plus Fund 1, which Hindenburg had connected to the “Adani stock manipulation,” long before Madhabi was appointed to SEBI.
The Buchs stated that they invested in the IPE Plus Fund 1 in 2015 under the management of 360 ONE Asset and Wealth Management, formerly known as IIFL Wealth Management. They pointed out that this investment was made over two years before Madhabi served as a Whole Time Member at SEBI, while they were living in Singapore as private citizens.
The statement went on to say that Mr Anil Ahuja, the Chief Investment Officer and Dhaval’s longtime buddy from school and IIT Delhi, had an impact on their choice to invest. Ahuja’s long career, which included positions at 3i Group plc, Citibank, and JP Morgan, played a big part in their choice to invest. When Ahuja left his position as CIO in 2018, the Buchs withdrew their stake in the fund.
