‘Investment referred to by Hindenburg made before Madhabi joined SEBI’: SEBI chairperson and husband deny Hindenburg charges

Mumbai (Maharashtra) [India], August 11 (ANI): A day after US-based short seller Hindenburg Research alleged that SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch had stakes in "both the obscure offshore entities used in the Adani money siphoning scandal," the SEBI Chairperson and her husband issued a detailed statement rejecting the allegations.
This followed a brief statement issued by them earlier on Sunday where they had accused Hindenburg of tarnishing their reputation.
The statement says that Madhabi Buch is an alumnus of IIM Ahmedabad and has had a corporate career of over two decades in banking and financial services, largely in the ICICI Group. From 2011 to March 2017, Madhabi lived and worked from Singapore, initially as an employee of a Private Equity firm and subsequently as a consultant.
Dhaval Buch is an alumnus of IIT Delhi and has had a corporate career of 35 years in Hindustan Unilever Limited in India and then in Unilever globally as part of its senior management team. From 2010 to 2019, Dhaval lived and worked in London and in Singapore - both with Unilever.
"During this long period, Madhabi and Dhaval have accrued their savings through their salaries, bonuses and stock options. Insinuations about their net worth and investments referencing Madhabi's current government salary is malicious and motivated," the statement reads
The statement says "The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member. "
"The decision to invest in this fund was because the Chief Investment Officer, Anil Ahuja, is Dhaval's childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, J.P. Morgan and 3i Group plc, had many decades of a strong investing career. The fact that these were the drivers of the investment decision is borne out by the fact that when, in 2018, Ahuja, left his position as CIO of the fund, we redeemed the investment in that fund," the statement further reads.
"As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company," the statement adds.
The joint statement also addresses the issue of the SEBI chairperson's husband's appointment with Blackstone Equity.
"Dhaval's appointment, in 2019, as Senior Advisor to Blackstone Private Equity was on account of his deep expertise in Supply Chain management. Thus, his appointment pre-dates Madhabi's appointment as SEBI Chairperson. This appointment has been in the public domain ever since. At no time has Dhaval been associated with the Real Estate side of Blackstone. On his appointment, the Blackstone Group was immediately added to Madhabi's recusal list maintained with SEBI," the statement reads.
"Over the last two years, SEBI has issued more than 300 circulars (including "Ease of Doing Business" initiatives in line with the developmental mandate of SEBI) across the entire market eco-system. All regulations of SEBI are approved by its Board (and not by its Chairperson) after extensive public consultation. Insinuations that a handful of these matters related to the REIT industry were favours to any specific party are malicious and motivated," the statement adds.
The joint statement also addresses the issue of consulting companies that were set up by the SEBI Chairperson before she assumed office.
"The two consulting companies set up by Madhabi during her stay in Singapore, one in India and one in Singapore, became immediately dormant on her appointment with SEBI. These companies (and her shareholding in them) were explicitly part of her disclosures to SEBI" the statement said.
"After Dhaval retired from Unilever in 2019, he started his consultancy practice through these companies. Dhaval's deep expertise in Supply Chain allowed him to work with prominent clients in the Indian industry. Thus, linking accruals in these companies to Madhabi's current government salary is malicious. When the shareholding of the Singapore entity moved to Dhaval, this was once again disclosed, not just to SEBI, but also to the Singapore authorities and the Indian tax authorities," the statement adds.
The joint statement also claimed that the Buch couple had disclosed all this to the required agencies.
"SEBI has strong institutional mechanisms of disclosure and recusal norms as per the code of conduct applicable to its officers. Accordingly, all disclosures and recusals have been diligently followed, including disclosures of all securities held or subsequently transferred," the statement said.
"Hindenburg has been served a show cause notice for a variety of violations in India. It is unfortunate that instead of replying to the Show Cause Notice, they have chosen to attack the credibility of the SEBI and attempt character assassination of the SEBI Chairperson," it added.
Earlier on Saturday, the US-based firm Hindenburg Research alleged that SEBI's Chairperson Madhabi Buch and her husband had a stake in "both the obscure offshore entities used in the Adani money siphoning scandal."
Hindenburg's research claimed in its analysis, "We had previously noted Adani's total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani's relationship with SEBI Chairperson, Madhabi Buch."
"What we hadn't realized: 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," the report by the US hedge firm said.
In January 2023, Hindenburg published a report accusing the Adani Group of financial irregularities, leading to a significant drop in the company's stock price. The group at the time had rubbished these claims.
In January 2024, the Supreme Court refused to transfer the probe into the allegations of stock price manipulation by the Adani group to an SIT and directed market regulator SEBI to complete its probe into two pending cases within three months.
Earlier this year the SC also dismissed a plea seeking to review the verdict that had sought investigation by the market watchdog SEBI in the Adani-Hindenburg case. (ANI)