Sebi-Hindenburg controversy: A timeline of allegations, the Buchs’ defence and market reaction

Adani Group stocks | over the weekend, Hindenburg released a fresh report. It alleged that SEBI chairperson Madhabi Puri Buch may not have conducted a proper investigation into impropriety at Adani group firms because of a potential conflict of interest from having invested in same funds that were used by the Adani executives for moving money.

Short seller Hindenburg Research made allegations of impropriety against Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch in an August 10 report.

The report alleged that Madhabi Puri Buch and her husband Dhaval Buch invested in offshore funds linked to the Adani Group, which SEBI was investigating.

The Buch couple and the market regulator, in separate statements, refuted the allegations, asserting that SEBI chair Madhabi Buch made all required disclosures and that no conflict of interest exists.

Here’s a detailed timeline of key events, from Hindenburg Research’s initial cryptic post on X about a major exposé to the weekend release of the report and ending with the market’s reaction to allegations of conflict of interest and impropriety involving Madhabi Buch when trading resumed on Monday.

August 10, 2024

• Hindenburg’s Cryptic Tease: Hindenburg Research posts a cryptic message on X, hinting at a major revelation related to India.

• New Allegations Against SEBI Chairperson Madhabi Puri Buch: Hindenburg releases a fresh report alleging that SEBI Chairperson Madhabi Puri Buch and her husband had invested in offshore entities linked to the Adani Group. The report claimed this showed a lack of transparency in SEBI’s investigation into the Adani Group. (Full Story)
• Hindenburg says Madhabi Puri Buch and Dhaval Buch invested in the same complex nested structure that was used by Vinod Adani (Full Story)
• Hindenburg alleges that SEBI regulations around REITs benefited Blackstone Private Equity, where Madhabi Puri Buch’s husband Dhaval Buch was Senior Advisor (Full Story)
• Hindenburg also says that Madhabi Puri Buch has 99% ownership in an Indian consulting firm, which earned nearly Rs 2 crore; it also said that she had 100% ownership in a Singapore consulting firm before transferring the ownership to her husband. (Full Story)

• Madhabi Puri, Dhaval Buch Deny Allegations: SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch strongly deny the allegation levelled by Hindenburg Research in a joint statement issued at 1:40 AM on August 11. They also say that they would soon issue a detailed rebuttal to Hindenburg allegations. (Full Story)
• Detailed Rebuttal: Madhabi Buch and Dhaval Buch issues detailed rebuttal to the Hindenburg report, saying they held no investments in Adani entities. Blackstone was added to Madhabi’s recusal list with Sebi on Dhaval’s appointment as an adviser to the investment fund, they say, adding that two consulting firms set up by Madhabi became dormant on her appointment at SEBI. (Full Story)
• Buch Statement Further Details: The statement clarifies that Dhaval Buch’s Blackstone role predates Madhabi Buch’s SEBI appointment and that Blackstone was on Madhabi’s recusal list (Full Story)
• Agora Consulting: Two consulting companies established by SEBI Chairperson Madhabi Puri Buch - one in India and one in Singapore - were made dormant following her appointment to SEBI, they say in the statement. (Full Story)
• SEBI Rebuts Hindenburg Allegations: Madhabi Puri Buch recused herself from conflict of interest matters, says SEBI in a rebuttal to Hindenburg’s fresh note. The allegations made by Hindenburg Research against the Adani Group have been duly investigated by SEBI, says the market regulator. (Full Story)
• Adani Group Statement: Adani Group rejects the allegations as recycled and baseless claims already dismissed by the Supreme Court in January 2024.

• Adani Stocks Fall, But Overcome Nervousness: Adani Group stocks initially fell on August 12, dropping 5-6 percent in early morning trading, but later regained some ground. The conglomerate's stocks ended the day mixed, with a few closing with mild gains. (Full Story)