Hindenburg Research’s latest allegations may weaken SEBI chairperson Madhabi Puri Buch’s case for a reappointment next year should she seek one.
“The government would have to stand behind her and justify that she’s innocent and a scapegoat. It’ll be easy for the government to nominate someone with a clean track record rather than waste time in justifications. Also, there is the issue of institutional integrity,” said a legal expert.
Buch’s three-year tenure as SEBI Chairperson ends in March next year, unless she is given an extension.
Sumit Agrawal, Founder at Regstreet Law Advisors and a former SEBI Officer said the allegations raised by Hindenburg appear to be speculative, relying on disconnected past events that bear no relevance to SEBI’s institutional decisions.
“While it is not uncommon for public figures to face such allegations, neither SEBI nor its Chairperson should feel compelled to respond to these accusations. It is evident that these allegations will be politically exploited, likely leading to calls for the non-extension of the incumbent’s term which ends in March 2025 or demanding a special investigation. It wouldn’t be a surprise if there are PILs filed on this in Supreme Court,” Agrawal said.
He added that such practices can unjustly tarnish reputations that have been built over time, showing how easily unrelated information can be twisted to fabricate a misleading narrative about regulatory decision-making.
According to Hindenburg, the SEBI Chairperson and her husband had stakes in a multi-layered offshore fund structure with miniscule assets, traversing known high-risk jurisdictions, overseen by a company with reported ties to the Wirecard scandal, in the same entity run by an Adani director and significantly used by Vinod Adani in the alleged Adani cash siphoning scandal.
The chief allegation about her holdings in some of the offshore funds is that of non-disclosure, said another legal expert. The rest of the allegations, he said, revolve around her husband joining REITs Blackstone without any experience and REITs industry getting a lot of benefits from SEBI, which is again based on innuendo rather than any proof.
“It all depends on how she wants to take it. This will be a head on collision between her and Hindenburg,” the official from a top law firm said.
Buch and her husband put out a statement denying the allegations and insinuations made in the report.
“Our life and finances are an open book. All disclosures as required have already been furnished to SEBI over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them. Further, in the interest of complete transparency, we would be issuing a detailed statement in due course,” the statement read.