Congress to the Government After Hindenburg’s Accusations

Following allegations made by US-based short-seller Hindenburg Research against SEBI Chairwoman Madhabi Buch, the Congress on Saturday demanded that the Centre take immediate action to remove all conflicts of interest in the regulator’s probe into Adani Group.

The opposition party also said the “apparent complicity of the country’s highest officials” could only be addressed by establishing a Joint Parliamentary Committee to investigate the full scale of the “fraud”.

Hindenburg Research on Saturday again attacked markets regulator Sebi’s chairwoman Madhabi Buch, accusing her and her husband of having stakes in undisclosed offshore funds that were used in the Adani money-siphoning scandal.

In a blog post, Hindenburg said that 18 months after its damning report on Adani, “SEBI has shown a surprising lack of interest in Adani’s alleged undisclosed network of Mauritius and offshore shell entities.”

There was no immediate comment from the Securities and Exchange Board of India, whose account X has also been “blocked” and posts have been made inaccessible to non-followers.

In a statement on the development, Congress general secretary in charge of communications Jairam Ramesh said the “strange reluctance of SEBI to investigate the mega Adani scam” had been noticed for long, including by the Supreme Court Expert Committee.

He said the Committee noted that SEBI had in 2018 diluted and in 2019 completely abolished the reporting requirements on ultimate beneficial (i.e. actual) holding of foreign funds.

“This tied its hands to such an extent that ‘the securities regulator suspected irregularities but also found compliance with various provisions in the accompanying regulations… It is this dichotomy that has led to SEBI having no say in the world,’” Ramesh said, quoting the Expert Committee.

The politician added, “Under public pressure, after the Adani horse bolted, the SEBI board reintroduced stricter reporting rules on June 28, 2023. It informed the Expert Committee on August 25, 2023, that it was probing 13 suspicious transactions. However, the investigations never bore fruit.”

He said Saturday’s revelations by Hindenburg Research showed that Buch and her husband had invested in the same offshore funds in Bermuda and Mauritius where “Vinod Adani and his close associates Chang Chung-Ling and Nasser Ali Shahban Ahli invested funds made from inflated bills for energy equipment.”

“It is also alleged that these funds were used to amass large stakes in Adani Group companies in violation of SEBI regulations. What is shocking is that Buch allegedly had a financial stake in the same funds,” Ramesh said.

The Congress leader said the disclosure raises fresh questions about Gautam Adani’s two meetings with Buch in 2022, which took place just after she took over as the chairperson of the equity market regulator.

“The government must take immediate action to remove any conflict of interest in the SEBI probe into the Adani case. The fact is that the apparent complicity of the country’s top officials can only be addressed by setting up a JPC (Joint Parliamentary Committee) to probe the full scope of the Adani scam,” the former Union minister said in a statement.

Earlier, tagging Hindenburg’s post about the accusations against X, Ramesh said: “Quis Custodiet Ipsos Custodes (Who will guard the guards themselves).”

In another post on X, Ramesh suspected the reason for the adjournment of the Parliament session two days before the scheduled date.

“Parliament was notified that the session would last until the evening of August 12. Suddenly it was adjourned sine die on the afternoon of August 9. Now we know why,” he wrote.

Last January, Hindenburg Research, which has historically bet against or bet against shares of companies such as electric truck maker Nikola Corp and Twitter (now X), accused Adani Group of “the biggest corporate fraud in history” by using a network of offshore companies to inflate earnings and manipulate stock prices while debt ballooned.

Although the conglomerate vehemently denied all allegations, the devastating report sent the group’s shares plummeting, wiping out more than $150 billion in market value for the 10 listed entities at their lowest point.

Most of the 10 listed companies have already made up for their losses.

Following the Hindenburg report, the Supreme Court asked market regulator Sebi to complete its investigation and set up a separate panel of experts to look into regulatory lapses.

The panel did not issue any adverse report on Adani and the top court also said no other inquiry beyond the one conducted by Sebi was necessary.

Last year, Sebi informed a Supreme Court-appointed committee that it was investigating 13 opaque offshore entities that held between 14 and 20 per cent stake in the conglomerate’s five publicly listed shares.

There was no information provided as to whether the two pending investigations had already been completed.

“The current SEBI chairwoman and her husband, Dhaval Buch, had hidden interests in exactly the same little-known offshore funds in Bermuda and Mauritius, housed in the same complex structure used by Vinod Adani,” Hindenburg alleged.

(Except for the headline, this story from a syndicated channel has not been edited by Odishatv.in staff)