Eighteen months after the first report by the US-based short-seller Hindenburg Research on the Adani group, the investment research firm released a report on August 10 alleging that SEBI Chairperson Madhabi Puri Buch and her husband had a stake in certain offshore entities used in the alleged Adani money siphoning scandal.
Let’s take a deep dive into the structure of the supposed stake held by the SEBI chief:
First, IIFL, now known as 360 Wealth Online, set up an offshore fund named “Global Opportunities Fund” (“GOF”), which was based in Bermuda, a tax-haven.
Under the GOF, a sub-fund named “Global Dynamic Opportunities Fund” (“GDOF”) was registered. Hindenburg Research claimed that a company controlled by Gautam Adani’s brother, Vinod Adani, invested in this “GDOF”.
Also Read | Hindenburg Research alleges SEBI chair Buch had stake in obscure offshore entities used in Adani scandal
"GDOF" invested the Adani group's siphoned funds in a sub-fund IPE Plus Fund, which is a small and obscure offshore fund registered in Mauritius, another tax haven, which then pooled the money into the domestic stock market and traded in Indian equities.
The founder and Chief Investment Office of the IPE Plus Fund was Anil Ahuja, who was previously a director in both Adani Power and Adani Enterprises over the span of his career.
So where does Madhabi Puri Buch’s involvement come in?
According to whistleblower documents accessed by Hindenburg, “the current SEBI Chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani.”
SEBI chair Madhabi Buch and her husband Dhaval Buch likely opened their account with IPE Plus Fund on June 5, 2015 in Singapore, per whistleblower documents.
According to a declaration of funds, signed by a principal at IIFL, the source of the couple’s investment is their salary, and their net worth is estimated at around $10 million.
Ahead of Madhabi Puri Buch’s appointment to SEBI as a Whole Time Member, her husband Dhaval Buch, wrote to the Mauritius fund administrator, regarding their investment in Trident Trust, according to documents we received from a whistleblower. The email was “Global Dynamic Opportunities Fund”.
The report said that Dhaval Buch requested to be the sole person authorised to operate the accounts, “seemingly moving the assets out of his wife’s name ahead of the politically sensitive appointment”.
The total value of Buch’s stake was worth U.S. $872,762.25 at the time.
The report further alleged that on February 25, 2018, while Buch held the position of a Whole-Time Member of SEBI, she emailed IIFL through her private account to redeem the units in the fund.
“In brief, despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry she now is responsible for regulating, documents show SEBI Chairperson Madhabi Buch and her husband had stakes in a multi-layered offshore fund structure with miniscule assets, traversing known high-risk jurisdictions, overseen by a company with reported ties to the Wirecard scandal, in the same entity run by an Adani director and significantly used by Vinod Adani in the alleged Adani cash siphoning scandal,” said the Hindenburg Group.
“We suspect SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani,” the report added.
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