Hindenburg Research Reports News: It has been nearly 18 months since Hindenburg Research first published its explosive report on the Adani Group, branding it as “the largest con in corporate history.” The report laid bare a vast and intricate web of offshore shell entities, primarily based in Mauritius, allegedly used by the Indian conglomerate for undisclosed related-party transactions, covert investments, and stock manipulation.
Despite the overwhelming evidence presented, corroborated by over 40 independent media investigations, the Indian Securities and Exchange Board (SEBI) has yet to take any meaningful public action against the Adani Group. This apparent regulatory inertia raises critical questions, particularly in light of recent whistleblower documents that suggest SEBI’s Chairperson, Madhabi Buch, and her husband, Dhaval Buch, might have direct ties to the very offshore funds at the heart of the scandal.
SEBI’s Lack of Action
Since the release of the original Hindenburg report, SEBI’s response has been curiously lackluster. Despite the mounting evidence and public outcry, the regulator has refrained from taking any significant steps against the Adani Group. Instead, SEBI has issued what appears to be token notices for minor, technical violations. This has led to widespread speculation that the regulator is intentionally downplaying the severity of the issues.
On June 27, 2024, SEBI sent a ‘show cause’ notice to Hindenburg Research. Interestingly, the notice did not challenge any of the factual assertions made in Hindenburg’s 106-page report. Instead, it focused on the adequacy of Hindenburg’s disclosure regarding its short position in Adani stocks—a disclosure that Hindenburg had already made multiple times.
SEBI further accused Hindenburg of being “reckless” for citing a banned broker with insider knowledge of SEBI’s operations. The broker had detailed how SEBI was allegedly aware of, and complicit in, Adani’s use of offshore entities to circumvent regulatory norms.
In response to SEBI’s notice, Hindenburg expressed its bewilderment at the regulator’s lack of interest in investigating the parties involved in Adani’s alleged offshore schemes. The Indian Supreme Court, too, noted SEBI’s failure to uncover any meaningful information regarding Adani’s offshore shareholders.
Adani’s Offshore Network: A Deep Dive
The Hindenburg report had previously detailed how Vinod Adani, Gautam Adani’s brother, allegedly used a complex structure of offshore entities to siphon funds from the Indian public. These entities included the Global Dynamic Opportunities Fund (GDOF) in Bermuda and the IPE Plus Fund 1 in Mauritius.
Vinod Adani’s company allegedly over-invoiced power equipment imports, with the excess funds being funneled into these offshore entities. A subsequent investigation by Adani Watch in December 2023 revealed that these entities, controlled by Vinod Adani, were major recipients of the laundered money.
The Financial Times also reported that the GDOF in Bermuda was used by two Adani associates to amass and trade large positions in Adani Group shares. This fund was managed by India Infoline (IIFL), a wealth management firm with a history of setting up convoluted investment structures. IIFL, now rebranded as 360 One, has been previously linked to the Wirecard scandal, Germany’s largest-ever fraud case.
One of the more obscure entities within this complex structure is the IPE Plus Fund, a small offshore fund registered in Mauritius. Despite having only $38.43 million in assets under management as of December 2017, the fund had significant ties to the Adani Group. The founder and Chief Investment Officer (CIO) of the IPE Plus Fund was Anil Ahuja, who had also served as a director of Adani Enterprises and Adani Power.
Whistleblower Documents: A Shocking Revelation
The most damning evidence came from whistleblower documents that revealed SEBI Chairperson Madhabi Buch and her husband had stakes in the very offshore funds allegedly used by Vinod Adani for money laundering.
According to the documents, Madhabi Buch and her husband opened an account with the IPE Plus Fund 1 on June 5, 2015, in Singapore. The source of their investment was listed as “salary,” with their net worth estimated at $10 million.
Madhabi Buch was appointed as a Whole Time Member of SEBI in April 2017. Just weeks before her politically sensitive appointment, her husband, Dhaval Buch, wrote to the Mauritius fund administrator Trident Trust, requesting to be the sole person authorized to operate their accounts, seemingly moving the assets out of his wife’s name.
In a later account statement dated February 26, 2018, addressed to Madhabi Buch’s private email, it was revealed that their investment was in the exact same Mauritius-registered “cell” of the fund used by Vinod Adani. At the time, their stake was valued at $872,762.25.
During her tenure at SEBI, Madhabi Buch allegedly conducted business through her husband’s name, using her private email, to redeem units in the offshore fund. This raises serious questions about potential conflicts of interest, given that SEBI is the very body responsible for regulating such entities.
SEBI’s Alleged Complicity in the Scandal
The Indian Supreme Court had previously noted that SEBI had “drawn a blank” in its investigation into Adani’s offshore shareholders. The whistleblower documents suggest a possible explanation for SEBI’s reluctance to take meaningful action: its Chairperson’s own involvement in the very funds under investigation.
To date, SEBI has taken no action against other suspect Adani shareholders, including the EM Resurgent Fund and Emerging India Focus Funds, both of which were disclosed as related parties of IIFL. These funds have been accused of artificially inflating the volume and price of Adani-listed companies.
Madhabi Buch’s Offshore Interests: A Conflict of Interest?
Further investigations revealed that Madhabi Buch had a 100% interest in an offshore Singaporean consulting firm called Agora Partners from April 2017 to March 2022, during her tenure as a Whole Time Member and later as Chairperson at SEBI. This entity is exempt from disclosing financial statements, raising questions about the sources of its revenue and potential conflicts of interest.
In March 2022, just two weeks after her appointment as SEBI Chairperson, Buch quietly transferred her shares in Agora Partners to her husband. This move likely reflected a desire to avoid the appearance of a conflict of interest, given her new role as the head of India’s securities regulator.
Dhaval Buch’s Role at Blackstone
During Madhabi Buch’s tenure at SEBI, her husband, Dhaval Buch, was appointed as a Senior Advisor to Blackstone, a global private equity firm and one of the largest investors in India. Despite lacking experience in real estate or capital markets, Dhaval Buch joined Blackstone in July 2019.
Blackstone has been a major player in the Indian REIT (Real Estate Investment Trust) market, sponsoring India’s first-ever REIT, Embassy, in April 2019. During Dhaval Buch’s time as an advisor, Blackstone sponsored two more REITs: Mindspace and Nexus Select Trust.
During this period, SEBI, under Madhabi Buch’s leadership, proposed and approved significant regulatory changes that benefited REITs. These included seven consultation papers, three consolidated updates, two new regulatory frameworks, and nomination rights for unit holders, specifically benefiting private equity firms like Blackstone.
SEBI Chairperson’s Promotion of REITs
Madhabi Buch has been a vocal advocate for REITs, describing them as her “favorite products for the future” at various industry conferences. She has urged investors to view REITs positively, predicting enormous growth in the asset class.
However, she has consistently failed to disclose that her husband, as an advisor to Blackstone, stands to gain significantly from the success of REITs in India. This lack of transparency further exacerbates concerns about conflicts of interest and regulatory capture.
Agora Advisory: A Lucrative Side Business
Madhabi Buch currently holds a 99% stake in an Indian consulting firm called Agora Advisory, where her husband is a director. In 2022, the firm reported $261,000 in consulting revenue—4.4 times Buch’s disclosed salary as a Whole-Time Member at SEBI.
The existence of this lucrative side business, coupled with her offshore interests, raises further questions about potential conflicts of interest and the integrity of SEBI’s regulatory oversight under her leadership.
Conclusion: Conflict or Capture?
The findings of Hindenburg Research raise serious concerns about SEBI’s ability to act as an objective and impartial regulator in the Adani matter. The alleged involvement of SEBI Chairperson Madhabi Buch and her husband in the very offshore funds used by the Adani Group for money laundering casts a long shadow over the regulator’s credibility.
As the investigation continues, the need for transparency and accountability has never been more urgent. The public and investors alike deserve to know whether SEBI can truly be trusted to safeguard the integrity of India’s financial markets.
Hindenburg Research remains committed to uncovering the truth and will continue to monitor developments in this ongoing investigation. Any proceeds derived from this report will be donated to causes that support free expression and investigative journalism.
Legal Disclaimer: This report represents the opinion and investigative commentary of Hindenburg Research. It is not a recommendation to buy or sell any securities. Hindenburg Research and its affiliates may hold