New Delhi: A storm of accusations has erupted around the Securities and Exchange Board of India (SEBI) following fresh allegations by US short-seller Hindenburg Research against SEBI Chairperson Madhabi Buch. The opposition Congress has called for immediate action, demanding a Joint Parliamentary Committee (JPC) to investigate what it terms a “mega scam” involving potential conflicts of interest within the regulatory body.
Hindenburg, known for its previous exposé of the Adani Group, has accused Buch and her husband of holding undisclosed stakes in offshore funds allegedly linked to the Adani Group’s money laundering scheme. The report also criticizes SEBI for its perceived reluctance to investigate the Adani Group’s network of shell companies based in Mauritius and other offshore locations. “Sebi has shown a surprising lack of interest in Adani’s alleged undisclosed web of Mauritius and offshore shell entities,” the Hindenburg report said.
Congress General Secretary Jairam Ramesh has condemned SEBI’s actions, citing observations by the Supreme Court’s Expert Committee that highlighted the dilution of reporting requirements related to foreign funds’ ultimate beneficial ownership in 2018 and 2019. Ramesh argues that these changes hampered SEBI’s ability to effectively investigate the alleged wrongdoing, leading to a “dead end” in the global probe.
Here is our statement on the latest Hindenberg revelations
Quis Custodiet Ipsos
Custodies pic.twitter.com/D1wGN2uJop— Jairam Ramesh (@Jairam_Ramesh) August 10, 2024
Ramesh further points to the alleged financial connection between Buch and her husband to offshore entities implicated in the Adani Group’s over-invoicing scandal. He also raises questions about the timing and significance of two meetings between Adani Group Chairman Gautam Adani and Buch shortly after she assumed her role as SEBI Chairperson. “It is shocking that Buch would have a financial stake in these same funds,” he said.
“The government must act immediately to eliminate all conflicts of interest in the Sebi investigation of Adani. The fact is that the seeming complicity of the highest officials of the land can only be resolved by setting up a JPC (joint parliamentary committee) to investigate the full scope of the Adani mega scam,” he added in the post.
The Congress leader’s call for a JPC echoes the sentiments of Trinamool Congress leader Mahua Moitra, who has questioned SEBI’s integrity under Buch’s leadership and urged the Supreme Court to reconsider its previous decision to rely solely on SEBI’s investigations.
We cannot trust SEBI under this Chairperson to do any enquiry into Adani. Supreme Court will HAVE to revisit its decision post this information becoming public. pic.twitter.com/7ynwaeJRGy
— Mahua Moitra (@MahuaMoitra) August 10, 2024
Meanwhile, Shiv Sena (UBT) leader Priyanka Chaturvedi attacked the Sebi saying that by SEBI chairperson’s involvement in the case it has become evident why SEBI did not respond to her inquiries about the Adani Group companies. Chaturvedi had requested details on the investigation into the Adani Group in April last year. “Now we know why our letters went unanswered and unacknowledged,” she remarked.
Shiv Sena (UBT) spokesperson Anand Dubey added that Hindenburg Research’s report implies the involvement of Sebi’s chief in the matter. “The question now is who will investigate this issue. The abrupt conclusion of the Parliament session only adds to the suspicion that something is amiss,” Dubey said.
It is pertinent to mention that Hindenburg Research’s January 2023 report had already accused the Adani Group of orchestrating “the largest con in corporate history,” triggering a massive sell-off that wiped out over USD 150 billion in market value across the conglomerate’s listed entities. Although the Adani Group has denied all allegations, the ongoing scrutiny has kept the issue in the public eye, with both Sebi and the Supreme Court facing mounting pressure to ensure a transparent and comprehensive investigation.