Hindenburg has claimed that SEBI chief Madhabi Buch had stake in an offshore entity linked to Adani.

A year-and-a-half after it alleged that billionaire Gautam Adani was running the “biggest con in corporate history”, Hindenburg Research on Saturday made another major allegation on the Adani issue, claiming that Sebi chairperson Madhabi Puri Buch had stakes offshore. Pooled funds.

“The current Sebi chairman and his husband, Dhaval Buch, hid stakes in murky offshore Bermuda and Mauritius funds found in a complex structure similar to that used by Vinod Adani,” Hindenburg said in a report published on its website.

Dubai-based Vinod Gautam is Adani’s elder brother and is said to have used the aforementioned structure to invest in Indian markets, allegedly channeling money from over-invoicing of power equipment to the Adani group.

The report, citing whistleblower documents, claimed that Buchs had opened his account with IPE Plus Fund 1 on June 5, 2015 in Singapore. The offshore Mauritius fund is said to have been set up by Adani directors through IIFL and is registered in tax haven Mauritius.

“Besides being used as an alleged funnel for Vinod Adani’s money, the small fund had other close ties to Adani. The founder and chief investment officer (CIO) of the IPE Plus fund was Anil Ahuja, according to his biography. At the same time, Ahuja was a director at Adani Enterprises where He served three terms for nine years ending in June 2017, according to his biography and exchange disclosure, prior to which he was a director of Adani Power,” Hindenburg alleged.

It said Adani’s confidence to continue operating without the risk of serious regulatory intervention “can be explained by Adani’s relationship with Sebi Chairperson, Madhabi Buch.”

“What we didn’t realize: the current SEBI chairman and his husband, Dhaval Butch, had stashed stakes in obscure offshore Bermuda and Mauritius funds found in the same complex structure used by Vinod Adani,” Hindenburg said.

The whistleblower claimed that a Vinod Adani-controlled company invested in the British Overseas Territory and tax haven Bermuda in the “Global Dynamic Opportunities Fund” (“GDOF”), which then invested in IPE Plus Fund 1.

A separate investigation by the Financial Times found that GDOF’s parent fund was used by two of Adani’s associates to “take and trade large positions in Adani Group stocks”.

Hindenburg said Sebi’s “reluctance to take meaningful action against suspected offshore shareholders in the Adani Group may be due to Buch’s involvement in using certain funds used by Vinod Adani”.

The US-based short-seller also produced a copy of Ministry of Corporate Affairs records that apparently show the Sebi chief owns 99% of a consulting business called Agora Advisory, where her husband is a director.

“In 2022, this entity reported an income of $261,000 from consulting, which was 4.4 times her declared salary to SEBI,” the report said, adding that the offshore Singaporean entity is exempt from disclosing financial statements so how much income it receives from its consulting. Not clear. occupation and from whom.

“In short, despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry that is now responsible for its regulation, documents show that SEBI chairperson Madhabi Buch and her husband held stakes in a multi-tier offshore fund structure with minimal assets. , across known high-risk jurisdictions, overseen by a company with reported ties to the Wirecard scam, run by an Adani director in the same entity and used significantly by Vinod Adani in the alleged Adani cash siphoning scam,” the report said. is

Pointing out that SEBI has not taken any action against other suspected Adani shareholders run by India Infoline: EM Resurgent Fund and Emerging India Focus Funds, he said: “If SEBI really wants to find offshore fund holders, perhaps the SEBI Chairperson can initiate .Looking in the mirror we find it surprising that SEBI was reluctant to lead its own chairman.”

About Sebi chief Dhaval Buch’s husband, Hindenburg said during his stint as a senior adviser at Blackstone, the regulator approved the IPO of two REITS backed by PE firms – Mindspace and Nexus Select Trust.

“During Dhawal Buch’s time as an advisor to Blackstone, SEBI proposed, approved and facilitated major changes in REIT regulation. These include 7 consultation papers, 3 consolidated updates, 2 new regulatory frameworks and nomination rights for entities, particularly benefiting private equity firms such as Blackstone,” Hindenburg said.

“During industry conferences, SEBI Chairperson Madhabi Buch termed REITs as her “favourite products for the future” and urged investors to look “positively” at the asset class. In making those statements, she omitted to mention that Blackstone, which her husband advises, benefits significantly from the asset class,” it said.

At Agora Advisory, which is said to be 99% owned by Madhabi Buch, the firm received from consulting Rs. 19.8 million, which was 4.4 times Madhabi Buch’s previously disclosed salary as a full-time member of SEBI.

Citing the data, Hindenburg said regulator Sebi could not be trusted as an objective arbiter in the Adani issue and that proceeds from the report would be donated to causes supporting free expression.

ET has written to SEBI seeking comments on the allegations. Their response is awaited.