Hindenburg Research Report Highlights: Madhabi Buch contributed massively towards development of Indian capital markets, says Madhu Kela

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Shares of eight of the ten Adani group firms ended lower on Monday after facing severe drubbing during the morning trade as the US short-seller Hindenburg Research alleged that Sebi chairperson Madhabi Puri Buch and her husband had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani to round-trip funds and inflate stock prices.

The Adani group firms, however, managed to recover most of their sharp early declines.

At close of trade, the stock of Adani Wilmar slumped 4.14 per cent, Adani Total Gas went lower by 3.88 per cent, Adani Energy Solutions dropped 3.70 per cent, NDTV fell by 3.08 per cent, Adani Ports dipped 2.02 per cent, Adani Enterprises declined 1.09 per cent, ACC (0.97 per cent) and Adani Power (0.65 per cent) on the BSE.

However, two of the group firms bounced back, with Ambuja Cements climbing 0.55 per cent and Adani Green Energy rising by 0.22 per cent.

Stepping up its attack on the Narendra Modi government over Hindenburg Research's allegations against SEBI chairperson Madhabi Puri Buch, the Congress on Monday threatened to launch a nationwide protest if its demand for a Joint Parliamentary Committee (JPC) probe into the matter is not accepted.

AICC General Secretary (Organisation) K C Venugopal described the allegations as "very serious" and accused the prime minister of supporting the Adani Group and its chairman Gautam Adani on the matter. "It's a situation where the fence itself is eating the crop; even the Supreme Court was misled," the Congress leader said. "The Supreme Court should take up the case on its own." He also said that the Congress would examine the legal aspects for approaching the top court on this matter.

"The prime minister's silence on the matter amounts to destruction of credibility," Venugopal told reporters.

The Indian Venture and Alternate Capital Association (IVCA) also said it stands firmly behind Buch in the "challenging times" and added that the markets regulator has shown an "unwavering commitment to market integrity, regulatory governance, and investor protection".

The support from the two bodies comes a day after mutual fund lobby grouping Amfi (Association of Mutual Funds in India) on Sunday backed Buch, saying the short-seller's report is an attempt to undermine Buch's contribution to the Indian capital market and the country's economic progress.

Indian REITs Association (IRA) said that claims made by the US-based short-seller suggesting that the REIT framework made by markets regulator Sebi serves the interests of a select few are "baseless and misleading".

The Finance Ministry on Monday said it has nothing more to add to the statements given by the Securities and Exchange Board of India and its chairperson Madhabi Puri Buch regarding Hindenburg's latest report.

"Sebi has made the statement. The chairperson has also made a statement. There is nothing further to be added by the government," Economic Affairs Secretary in the Finance Ministry Ajay Seth told reporters.

NCP (SP) working president Supriya Sule said there should be a discussion in Parliament on the Hindenburg Research's allegations against SEBI chairperson Madhabi Buch.

The BJP on Monday rejected the Congress' demand for a JPC probe into Hindenburg's allegation against the SEBI chairperson, saying it is a sham with an eye on weakening the Indian economy and destroying investment in the country.

BJP leader and former Union minister Ravi Shankar Prasad reiterated the party's line that the short-selling firm's charge and the opposition's criticism of the market regulator are part of a wider conspiracy.

While India is being globally seen as a safe, stable and promising market, the Congress party wants to project that the Indian investment scenario is not safe, he alleged, suggesting that the opposition party was seizing on the "chits" provided by foreign entities to damage economy.

Union Minister Giriraj Singh on Monday said Hindenburg Research has defamed the country in alliance with Congress and the "strictest action" will be taken against the US short-seller.

"This is a gang to defame the country, Rahul (Gandhi) and Jairam Ramesh. Hindenburg defames us. We will not tolerate this insult to the nation. These people are enemies of the country. Now strictest action will be taken against Hindenburg," Singh said.

Former ED, Sebi official JN Gupta speaks on Hindenburg Report

He said, "Madhabi Puri Buch's rebuttal has been fair, and there seems to be not an iota of truth in the allegations which seem to be an effort to create fiction out of nothing."

"Some investment before tenure at Sebi were made in a fund where Vinod Adani — brother of billionaire Gautam Adani - was an investor. When we invest in MFs, do we ask details of all the co-investors?" he added.

The alternate capital industry (IVCA) in a statement said, "Under Ms. Buch’s leadership, SEBI has consistently demonstrated an unwavering commitment to market integrity, regulatory governance, and investor protection."

"We believe that the recent allegations made by Hindenburg are unwarranted and reflect a lack of understanding of the Indian regulatory environment," IVCA added.

Market veteran Madhusudhan Kela strongly dismissed US short seller Hindenburg Research's allegations against Sebi chief Madhabi Puri Buch and her husband, labeling them as part of a broader 'conspiracy' aimed at undermining India's reputation rather than presenting any genuine claims against individuals or groups.

Kela pointed out that the report seemed filled with 'conspiracy' claims and failed to present any clear, actionable allegations.

Madhusudan Kela assured investors that there is no need for concern and expects the markets to absorb this news quickly

"Before releasing this report, they should have considered their own credibility. People took note of the first report, but nothing substantial came of it. The group in question has come out strong, even doing a $1 billion QIP recently with participation from top investors, including myself. I don’t think this will do any lasting damage, either to the group or the market at large," he added.

Union Minister Giriraj Singh said Hindenburg Research has defamed the country in alliance with Congress and the "strictest action" will be taken against the US short-seller.

"This is a gang to defame the country, Rahul (Gandhi) and Jairam Ramesh. Hindenburg defames us. We will not tolerate this insult to the nation. These people are enemies of the country. Now strictest action will be taken against Hindenburg," Singh said.

Market veteran Madhusudhan Kela strongly dismissed US short seller Hindenburg Research's allegations against Sebi chief Madhabi Puri Buch and her husband, labeling them as part of a broader 'conspiracy' aimed at undermining India's reputation rather than presenting any genuine claims against individuals or groups.

Kela pointed out that the report seemed filled with 'conspiracy' claims and failed to present any clear, actionable allegations.

Full story here.

BJP MP Ravi Shankar Prasad said, "Today we want to raise some issues. Whose investment is there in Hindenburg? Do you know this gentleman George Soros who regularly runs propaganda against India...He is the main investor there...In their pathological hatred against Narendra Modi, the Congress Party today has developed hatred against India itself."

"If India's stock market gets disturbed, will the small investors be troubled or not?...In the politics of the Congress party, there is one toolkit politics, the other is chit politics. If chits are found in the exam, action is taken. But what should be done about the chits that the Congress party and its leaders get?...They want to crash the entire stock market, stop the capital investment of small investors and ensure that there should be no economic investment in India," he added.

BJP MP Ravi Shankar Prasad said, "...After being rebuffed by the people of India, the Congress party, its allies and the toolkit gang have conspired together to usher in economic anarchy and instability in India?"

"Hindenburg report is released on Saturday, there is uproar on Sunday so the capital market is destabilized on Monday...India is a safe, stable and promising market in the shares as well. It is SEBI's legal responsibility to ensure that the market runs smoothly," he added.

He further said, "When SEBI issued a notice against Hindenburg, after completing its entire inquiry in July, which was done under the supervision of the Supreme Court, then without giving any answer in favour of its defence, they have made this attack, a baseless attack..."

"The IVCA expresses full confidence in Ms. Buch's leadership and her ability to navigate these allegations with the same diligence and integrity that have characterized her tenure. We remain committed to working closely with SEBI and its leadership to ensure the continued growth and success of the Indian capital markets," IVCA said in a statement.

The alternate capital industry (IVCA) in a statement said, "Under Ms. Buch’s leadership, SEBI has consistently demonstrated an unwavering commitment to market integrity, regulatory governance, and investor protection."

"We believe that the recent allegations made by Hindenburg are unwarranted and reflect a lack of understanding of the Indian regulatory environment," IVCA added.

Centre's first reaction on Hindenburg's allegations against SEBI chief Madhabi Puri Buch

"The regulators have spoken, the government has nothing to add," says Dept. of Economic Affairs Secy Ajay Seth.

Sanjay Asher, from Crawford Bayley and Co said Madhabi Puri Buch and husband have amply clarified their tenures and holding, all allegations have been denied and I would believe them given their stature and career.

"I do not see any merit in the Hindenburg report. If all clarifications have been put out, it is fine."

"No point answering Hindenburg's allegations."

"They should file a defamation suit against Hindenburg, Govt too should take stringent action against the entity, they cannot issue reports without much facts in it."

"Need to look into US laws for legal recourse, surely even Indian jurisdiction can be considered."

Former ED, Sebi official JN Gupta speaks on Hindenburg Report

He said, "Madhabi Puri Buch's rebuttal has been fair, and there seems to be not an iota of truth in the allegations which seem to be an effort to create fiction out of nothing."

"Some investment before tenure at Sebi were made in a fund where Vinod Adani — brother of billionaire Gautam Adani - was an investor. When we invest in MFs, do we ask details of all the co-investors?" he added.

Hindenburg Research Report LIVE Updates: "Turns out, the Hindenburg wasn’t so smart..." Vijay Kedia on short-selling firm's report

The Buchs invested in IPE-Plus Fund 1, cited in the Hindenburg report, in 2015 when they were private citizens living in Singapore and based on their friendship with Anil Ahuja and his career in banks and investment firms.

They exited the investment in 2018 when Ahuja left his position as chief investment officer. The fund never invested in any Adani group securities.

BJP leader Nalin Kohli said, "This is very worrying. An international company, is coming up with reports. SC did not find facts in the report, they had set it aside. Now it is happening again, at a time when the Parliament session is ongoing."

"Congress and other parties are riding on it. We need to think whether international forces are attacking the Indian democracy and economy? We need to investigate. Rahul Gandhi is the LoP, does he have to support it? We need to introspect and work together to save the country," he added.

Adani Enterprises falls as much as 5.3% in early trade, Adani Energy falls as much as 17%

Hindenburg Research has highlighted that SEBI, which is investigating investment funds linked to the Adani Group, might be examining funds that include investments made by SEBI Chairperson Madhabi Puri Buch, raising concerns about potential conflicts of interest.

On August 10, Hindenburg Research -- the short seller behind the 2023 report on Adani group -- in a fresh note alleged SEBI chair Madhabi Puri Buch had a stake in offshore entities linked to the Adani case.

The report claimed these funds, based in Bermuda and Mauritius, were allegedly controlled by Vinod Adani, Gautam Adani’s elder brother, and were used to manipulate funds and inflate stock prices.

Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, strongly denied Hindenburg Research’s allegations that she held stakes in offshore entities tied to Adani group companies.

Addressing the allegations, the Buchs clarified that their 2015 investment in offshore entities, cited in Hindenburg’s August 10 report, happened while they were private citizens in Singapore, two years before Madhabi’s appointment as a SEBI director.

They said the investment decision was influenced by Anil Ahuja, a childhood friend of Dhaval and a veteran of Citibank, J.P. Morgan, and 3i Group Plc. They said the investment was redeemed in 2018 when Ahuja left the fund and never involved Adani group securities.

Hindenburg Research called for a full, transparent, and public investigation into these issues, citing Buch’s promise of a “commitment to complete transparency.”

Madhabi Buch claimed that the two consulting companies she established—one in India and another in Singapore—became dormant immediately after her appointment at SEBI in 2017.

However, her husband reportedly took over the businesses in 2019.

Hindenburg says that Madhabi 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 also 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.

The Congress on Sunday slammed the Modi government over the Hindenburg Research's allegations against SEBI chairperson Madhabi Buch, with Rahul Gandhi saying the integrity of the market regulator has been "gravely compromised" and demanded a JPC probe into the entire matter.

Gandhi also attacked Prime Minister Narendra Modi over the issue, saying that it is now “abundantly clear why PM Modi is so afraid" of a joint parliamentary committee (JPC) probe.

Meanwhile, SEBI has addressed several claims in response to the Hindenburg Research report. The report alleged that SEBI had failed to act against the Adani Group and questioned the issuance of a show-cause notice to Hindenburg Research on June 27, 2024. It also suggested that SEBI modified the SEBI (REIT) Regulations 2014 to benefit a multinational financial conglomerate. SEBI's statement asserted that these claims require a detailed response and confirmed that the allegations against the Adani Group have been minutely investigated.

Hindenburg Research also stated in its X post that Indian firm Agora Advisory Limited earned INR 23.985 million (around USD 312,000) in revenue over the financial years 2022, 2023, and 2024, while Madhabi Puri Buch was SEBI Chairperson. The short-selling firm expressed concerns about possible undisclosed business activities, citing whistleblower documents that suggest Buch used her personal email to conduct business under her husband’s name during her tenure at SEBI.

Additionally, Hindenburg noted that Madhabi Buch had claimed her two consulting firms - one in India and one in Singapore - became dormant after her appointment to SEBI in 2017. However, her husband reportedly took over these businesses in 2019. Hindenburg asserts that Madhabi Buch still owns 99% of the Indian firm, Agora Advisory Limited, which remains active and revenue-generating. The Singaporean entity, Agora Partners Singapore, was fully owned by Buch until March 16, 2022, during her tenure as a SEBI Whole Time Member, before she transferred ownership to her husband shortly after assuming the SEBI Chairperson role.

Hindenburg Research has highlighted that SEBI, which is investigating investment funds linked to the Adani Group, might be examining funds that include investments made by SEBI Chairperson Madhabi Puri Buch, raising concerns about potential conflicts of interest.

The Securities and Exchange Board of India (SEBI) is working to reassure investors and stabilise market sentiment in the wake of a new report by Hindenburg Research. The report, published on August 10, alleged that SEBI chair Madhabi Puri Buch had investments in offshore entities associated with the Adani case. SEBI has responded with a press release to address these concerns and reinforce investor confidence.

In response to the allegations, the Buchs clarified that their 2015 investment in offshore entities, mentioned in Hindenburg’s August 10 report, was made while they were private citizens living in Singapore, two years before Madhabi Puri Buch's appointment as a SEBI director. They explained that the investment decision was guided by Anil Ahuja, a longtime friend of Dhaval Buch and a seasoned professional with experience at Citibank, J.P. Morgan, and 3i Group Plc. The Buchs also noted that the investment was redeemed in 2018, when Ahuja departed from the fund, and that it had no connection to Adani group securities.

Hindenburg Research Report LIVE Updates: In their statement, the Buchs clarified that the contested investment was made prior to Madhabi Puri Buch's tenure at SEBI and was managed by a trusted friend. They concluded by condemning the Hindenburg report as a deliberate attempt to undermine SEBI and its Chairperson. The Buchs accused Hindenburg Research of character assassination and neglecting the show cause notice that had been previously issued to them.