SEBI chief denies Hindenburg’s offshore fund accusations

The Indian financial sector has been rocked by recent allegations by Hindenburg Research, a US short-seller. The firm accused Securities and Exchange Board of India (SEBI) Chairwoman Madhabi Puri Buch and her husband Dhaval Buch of having hidden stakes in offshore funds linked to the Adani Group. The allegations suggest a potential conflict of interest, given Madhabi Puri Buch’s regulatory role at SEBI.

The couple has vehemently denied the accusations, calling them an attempt to assassinate their character. They say the accusations are baseless and devoid of truth. In a joint statement, they said: “In the context of the accusations contained in the Hindenburg Report of August 10, 2024 against us, we would like to state that we vehemently deny the unfounded accusations and insinuations contained in the report.”

They further stressed that their lives and finances are an open book and they do not hesitate to disclose any financial records to any authority that may request them. They also promised to issue a detailed statement in due course, in the interest of complete transparency.

Hindenburg Research’s allegations come after an enforcement action and show-cause notice issued by SEBI to the Nate Anderson-led firm last month. The market regulator accused Hindenburg and Anderson of violating regulations under SEBI’s Prevention of Fraudulent and Unfair Trade Practices and SEBI’s Code of Conduct for Research Analysts.

The regulator also accused Hindenburg of making illicit profits through collusion, using non-public and misleading information to create panic selling. SEBI’s action added another layer of complexity to the controversy, raising questions about the motives behind Hindenburg’s accusations.

The Adani Group, which is also implicated in the allegations, has categorically denied any business dealings with SEBI. The group has described the allegations as malicious, malicious and manipulative cherry-picking of publicly available information to draw predetermined conclusions regarding personal gains with wanton disregard for facts and law. They have further said that their entire overseas holding structure is fully transparent and all relevant details are regularly disclosed in numerous public filings.

The controversy has also caught the attention of the U.S. Securities and Exchange Commission (SEC), which has been tightening its grip on short-selling firms. In late July, the U.S. capital markets regulator announced action against short-selling firm Citron Capital and its CEO Andrew Left for alleged ill-gotten gains.

The allegations and subsequent denials by Madhabi Puri Buch and her husband have sparked a heated debate in the Indian financial sector. Opposition parties, including the Congress, have launched a withering attack on the Centre over Hindenburg’s allegations, demanding immediate action to eliminate all conflicts of interest in the SEBI probe into the Adani Group.

The Hindenburg Research allegations have enraged the Indian financial sector. The emphatic denials by Madhabi Puri Buch and her husband, coupled with the support of the Adani Group, set the stage for a high-stakes fight. As the controversy unfolds, questions remain about how it will affect the Indian financial sector and the reputations of the individuals and entities involved. The situation requires a thorough and transparent investigation to ensure that the truth prevails.

(Based on data from IANS)