The Securities and Exchange Board of India (SEBI) is taking steps to reassure investors and stabilise market sentiment following the latest report by Hindenburg Research, according to a press release issued by the market regulator. On August 10, a report by Hindenburg Research alleged SEBI chair Madhabi Puri Buch had a stake in offshore entities linked to the Adani case.
Following the allegations, SEBI issued a statement on August 11, urging investors to remain calm and exercise due diligence in light of the report. "Investors should remain calm and exercise due diligence before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report."
The Hindenburg report questioned SEBI's handling of the Adani Group investigations and the issuance of a show cause notice to Hindenburg Research itself. SEBI clarified that it has diligently investigated allegations against the Adani Group, with 23 out of 24 investigations completed and substantial documentation and international cooperation involved.
Hindenburg's report also criticised SEBI for amending the SEBI (REIT) Regulations 2014, suggesting these changes benefited Blackstone. The report alleges that Madhabi Buch's consulting companies, which became dormant after her appointment as SEBI Chairperson, and her husband's consultancy, are linked to the ongoing controversy.
SEBI said that it has adequate internal mechanisms for addressing issues relating to conflict of interest, which include a disclosure framework and provision for recusal. "It is noted that relevant disclosures required in terms of holdings of securities and their transfers have been made by the Chairperson from time to time. Chairperson has also recused herself in matters involving potential conflicts of interest," SEBI said in a press release.
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