SEBI chief Madhabi Puri, husband call Hindenburg allegations ‘baseless and insinuations’

SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch refuted the allegations made against them by American short-seller Hindenburg Research terming them as baseless and insinuations aimed at character assassination.

They said the investment in the fund referred to in the Hindenburg report (IPE Plus Fund 1) was made in 2015 when they were private citizens living in Singapore, almost two years before Madhabi joined SEBI.

The decision to invest in the fund was driven by the fact that its Chief Investment Officer, Anil Ahuja, was Dhaval’s childhood friend who had been an investment professional for many years. This is borne out by the fact that the Buch’s redeemed the investment in the fund after Ahuja left his position as fund CIO in 2018, they said. At no point in time did the fund invest in any bond, equity, or derivative of any Adani group company.

Blackstone connection

The statement clarified that Dhaval’s appointment in 2019 as Senior Advisor to Blackstone Private Equity was on account of his deep expertise in supply chain management and pre-dates Madhabi’s appointment as SEBI Chairperson. 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.

“Over the last two years, SEBI has issued more than 300 circulars, all of which were approved by its Board 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 note said.

Consulting firms

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 Madhabi’s shareholding in them were disclosed to SEBI.

Dhaval started his own consultancy practice through these companies in 2019. When the shareholding of the Singapore entity moved to Dhaval, this was disclosed to SEBI, Singapore authorities and the Indian tax authorities.

“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.

360 One’s response

In a separate statement, 360 One (formerly IIFL Wealth & Asset Management) said its IPE-Plus Fund 1 made no investments in any shares of the Adani Group either directly or indirectly through any fund throughout its between October 2013 and October 2019.

No investor had any involvement in the fund’s operations or investment decisions. Madhabi and Dhaval Buch’s holdings in the fund were less than 1.5 per cent of the total inflow into the fund.

At its peak, the fund’s assets under management reached about $48 million, with over 90 per cent of the fund consistently invested in bonds.

Adani weighs in

Terming the fresh allegations as malicious, the Adani Group said its overseas holding structure is fully transparent, with all relevant details disclosed regularly in public documents. Further, Anil Ahuja was a nominee director of 3i investment fund in Adani Power (2007-2008) and, later, a director of Adani Enterprises until 2017.

“The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing. We remain steadfastly committed to transparency and compliance with all legal and regulatory requirements,” an Adani Group spokesperson said.

SEBI’s response

Responding to Hindenburg’s allegations, SEBI said that while it refrains from commenting on any investigation/ ongoing enforcement matter, “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.”