Congress demands elimination of conflicts of interest in SEBI's Adani probe following Hindenburg allegations

Hindenburg's latest blog post alleges that Madhabi Buch and her husband, Dhaval Buch, had undisclosed stakes in the same offshore funds tied to Vinod Adani

The Congress party on Saturday called on the central government to take immediate action to eliminate all conflicts of interest in the Securities and Exchange Board of India's (SEBI) investigation of the Adani Group, following fresh allegations made by the US-based short-seller Hindenburg Research against SEBI Chairperson Madhabi Buch.

The opposition party also reiterated its demand for the formation of a Joint Parliamentary Committee (JPC) to investigate what it termed the "full scope of the scam," expressing concerns over the "seeming complicity of the highest officials of the land."

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Hindenburg Research, known for its earlier explosive report on the Adani Group, has now accused Buch and her husband of having stakes in obscure offshore funds allegedly used in the Adani money siphoning scandal. In a blog post, the research firm criticized SEBI's apparent lack of interest in probing Adani's alleged web of Mauritius and offshore shell entities, 18 months after its initial report. SEBI has yet to comment on the latest allegations, and its X (formerly Twitter) account was found to be 'locked,' with posts inaccessible to non-followers.

Responding to the developments, Congress General Secretary in-charge of communications Jairam Ramesh issued a statement questioning SEBI's reluctance to thoroughly investigate what he described as the "Adani mega scam." Ramesh cited observations from the Supreme Court's Expert Committee, which noted that SEBI had diluted and eventually removed reporting requirements concerning the ultimate beneficial ownership of foreign funds in 2018 and 2019, respectively. This, he argued, hampered SEBI's ability to fully investigate the matter.

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Ramesh also highlighted that under public pressure, SEBI's board reintroduced stricter reporting rules on June 28, 2023, and informed the Expert Committee on August 25, 2023, that it was investigating 13 suspicious transactions. However, he claimed these investigations have not yielded significant results.

The Hindenburg Research's latest revelations allege that Buch and her husband invested in the same Bermuda and Mauritius-based offshore funds linked to Vinod Adani and his close associates, funds reportedly used to amass large stakes in Adani Group companies in violation of SEBI regulations. Ramesh expressed shock over Buch's alleged financial stake in these funds and raised concerns about Gautam Adani's meetings with her shortly after she assumed the role of SEBI chairperson.

"The government must act immediately to eliminate all conflicts of interest in SEBI's investigation of Adani," Ramesh asserted. He reiterated the need for a JPC to thoroughly investigate the matter, stating that only such a committee could resolve the "seeming complicity of the highest officials."

Also Read | 4 key allegations levelled against SEBI chair Madhabi Puri Buch in latest Hindenburg report

Earlier, Ramesh had taken to X to question the sudden adjournment of Parliament two days ahead of schedule, hinting that it might be related to the latest developments. In another post, he referenced the Latin phrase "Quis Custodiet Ipsos Custodes?" (Who will guard the guards themselves?), implying concerns about the integrity of those in charge of the investigation.

In January last year, Hindenburg Research accused the Adani Group of perpetrating "the largest con in corporate history" through a web of companies in tax havens to inflate its revenue and manipulate stock prices, leading to a significant drop in the market value of Adani's listed entities. Although the Adani Group denied the allegations, the report prompted the Supreme Court to direct SEBI to investigate and set up an expert panel to examine potential regulatory lapses. The panel did not issue any adverse findings against Adani, and the Supreme Court stated that no further probes beyond SEBI's were necessary.

SEBI had previously informed the Supreme Court-appointed panel that it was investigating 13 opaque offshore entities holding significant stakes in Adani's publicly traded stocks. The current status of these investigations remains unclear.

Hindenburg's latest blog post alleges that Madhabi Buch and her husband, Dhaval Buch, had undisclosed stakes in the same offshore funds tied to Vinod Adani, raising further questions about the impartiality of SEBI's ongoing probe into the Adani Group.

(With inputs from PTI)