SEBI refutes Hindenburg's claims of REIT regulation bias as "inappropriate"

SEBI

SEBI has refuted allegations from Hindenburg Research suggesting that amendments to Real Estate Investment Trusts (REITs) regulations were intended to benefit major financial conglomerates such as Blackstone, calling the claim "inappropriate." On August 10, Hindenburg Research alleged SEBI chair Madhabi Puri Buch had a stake in offshore entities linked to the Adani case.

Hindenburg Research also brought to attention SEBI Chairperson Madhabi Puri Buch's connections and raised concerns about possible conflicts of interest related to SEBI's regulatory changes affecting the REIT sector, considering her husband Dhaval Buch was appointment as Senior Advisor to Blackstone Private Equity in 2019.

In response, on August 11, SEBI said, "The report has also stated that the implementation of the SEBI (REIT) Regulations 2014 as well as changes in such regulations had resulted in significant benefit to a large multinational financial conglomerate. In this regard, it may be noted that the SEBI (REIT) Regulations, 2014 has been amended from time to time."

Also Read | Sebi regulations around REITs benefited Blackstone Private Equity where Madhabi Puri Buch’s husband Dhaval Buch was Senior Advisor, alleges Hindenburg

SEBI said that it ensures a thorough consultation process when introducing new regulations or amending existing ones. This process includes gathering feedback from industry stakeholders, investors, intermediaries, advisory committees, and the public. Proposals are only presented to the SEBI Board after this comprehensive consultation. Once approved, regulations are officially notified, and SEBI publishes the agenda papers and outcomes of Board meetings on its website for transparency. "Hence, claims that such regulations, changes to regulations or circulars issued related to REITs were to favour one large multinational financial conglomerate, are inappropriate."

The market regulator said that it has consistently highlighted the role of REITs, SM REITs, InvITs, and Municipal Bonds, etc to advance the Indian securities market. These instruments are key drivers for market democratisation, enhancing household savings, and facilitating capital formation through the financial markets, SEBI said.

"SEBI has adequate internal mechanisms for addressing issues relating to conflict of interest, which include disclosure framework and provision for recusal." SEBI assured that the Chairperson has made all necessary disclosures and recused herself in matters involving potential conflicts of interest.

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