August 12, 2024
New Delhi, India
Hindenburg Research Vs SEBI Chief
In a series of tweets on X (formerly Twitter), Hindenburg Research responded to statements made by SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, regarding allegations that surfaced on August 10, 2024. The Buchs addressed the accusations, clarifying their 2015 investment in a fund while they were private citizens living in Singapore, almost two years before Madhabi Buch joined SEBI as a Whole Time Member.
The Buchs’ Clarification: The Buchs explained that their decision to invest in the fund was influenced by Anil Ahuja, the Chief Investment Officer, and a childhood friend of Dhaval Buch. Ahuja, who has an extensive background in finance, having worked at Citibank, JP Morgan, and 3i Group plc, was a key factor in their investment decision. The Buchs also asserted that the fund did not invest in any bonds, equities, or derivatives of Adani Group companies, as confirmed by Ahuja.
Hindenburg’s Response: Hindenburg quickly countered the Buchs’ explanation, stating that SEBI Chairperson Madhabi Buch’s response contained several significant admissions and raised new critical questions. The firm pointed out that Buch’s public acknowledgment of her investment in an “obscure” Bermuda/Mauritius fund structure, allegedly connected to funds siphoned by Vinod Adani, was concerning. Hindenburg also noted that the fund was managed by a childhood friend of Dhaval Buch, who, at the time, was an Adani director—a detail that could signal a conflict of interest.
Conflict of Interest Allegations: Hindenburg further emphasized that SEBI had been tasked with investigating investment funds linked to the Adani Group, which might include funds in which Buch herself was invested. This raised questions about a potential conflict of interest. Additionally, Hindenburg pointed out that Madhabi Buch claimed the two consulting companies she established—one in India and another in Singapore—became dormant after her appointment at SEBI in 2017. However, her husband reportedly took over the businesses in 2019. Despite this, Buch still owns 99% of the Indian entity, Agora Advisory Limited, which is active and generating consulting revenue. The Singaporean entity, Agora Partners Singapore, was entirely owned by Buch until March 16, 2022—during her tenure as a Whole Time Member of SEBI—before she transferred ownership to her husband shortly after becoming SEBI Chairperson.
Financial Activities and Whistleblower Allegations: Hindenburg also claimed that the Indian entity, Agora Advisory Limited, generated INR 23.985 million (approximately USD 312,000) in revenue during the financial years 2022, 2023, and 2024, while Madhabi Buch was serving as SEBI Chairperson. The firm raised concerns about potential undisclosed business activities, citing whistleblower documents that allege Madhabi Buch used her personal email to conduct business under her husband’s name during her time at SEBI.
Questions About Additional Investments: Adding to the allegations, Hindenburg claimed that weeks before her appointment as SEBI Whole Time Member in 2017, Madhabi Buch ensured that accounts with ties to Adani were registered solely in her husband’s name. The firm referenced a private email allegedly sent by Buch a year into her SEBI term, showing that she redeemed stakes in the funds through her husband’s name. Hindenburg questioned what other investments or business dealings the SEBI Chairperson might have conducted through her husband while serving in her official capacity. The firm urged Buch to release a full list of consulting clients and details of engagements through both the Singaporean and Indian consulting firms, as well as any other entities she or her husband might be involved in. Hindenburg called for a full, transparent, and public investigation into these issues, citing Buch’s promise of a “commitment to complete transparency.”
As the controversy unfolds, Hindenburg’s latest claims have intensified scrutiny on SEBI Chief Madhabi Puri Buch, raising new questions about potential conflicts of interest and undisclosed financial activities. The call for transparency and a public investigation highlights the ongoing tensions between the research firm and India’s top market regulator.
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