Who is Madhabi Puri Buch allegedly have stake in offshore entities?

Eighteen months after its report on the Adani Group, U.S.-based short-seller Hindenburg Research made new allegations on Saturday, claiming that Madhabi Puri Buch, Chairperson of the Securities and Exchange Board of India (SEBI), and her husband, Dhaval Buch, held stakes in offshore entities implicated in the Adani money siphoning scandal. Hindenburg asserts that despite evidence and over 40 media investigations, SEBI has taken no public action against the Adani Group.

In a blog post, Hindenburg stated, "SEBI has shown a surprising lack of interest in Adani's alleged undisclosed network of Mauritius and offshore shell entities." Citing whistleblower documents, the short-seller claimed that Madhabi Buch and her husband were involved with offshore funds connected to the scandal. These offshore entities, allegedly controlled by Vinod Adani, the elder brother of Adani Group Chairman Gautam Adani, are accused of being used to round-trip funds and inflate stock prices.

Hindenburg claims that since its original report exposing “the largest con in corporate history,” SEBI has not taken significant public steps against the Adani Group. Instead, on June 27, 2024, SEBI sent Hindenburg a “show cause” notice. The notice, according to Hindenburg, did not dispute any of the factual claims in their 106-page report but criticized the firm for insufficient disclosure of its short position, despite Hindenburg’s repeated disclosures.

The short-seller alleged that the Adani Group’s confidence in avoiding regulatory consequences might be linked to its relationship with SEBI’s chairperson. Hindenburg claims that the Buchs concealed their stakes in offshore funds, registered in Bermuda and Mauritius, used by Vinod Adani.

Hindenburg claims the Buchs may have opened an account with IPE Plus Fund 1 in Singapore on June 5, 2015. This fund, a small offshore Mauritius entity, was reportedly established by an Adani director through India Infoline (IIFL), a wealth management firm connected to the Wirecard embezzlement scandal. Hindenburg alleges Vinod Adani used this structure to invest in Indian markets using funds siphoned from over-invoicing of power equipment to the Adani Group.

The short-seller revealed a fund declaration signed by an IIFL principal indicating the Buchs' investment source as "salary," and estimated their net worth at $10 million.

Who is Madhabi Puri Buch?

Madhabi Puri Buch, born in 1966, is the current chairperson of the Securities and Exchange Board of India (SEBI) and the first woman to lead the organization. She became a Whole Time Member in April 2017 under former chairperson Ajay Tyagi, and is the first person from the private sector to hold this position. Her tenure has brought significant changes to improve efficiency and modernize the regulatory body.

Buch began her education at Fort Convent School in Mumbai and Convent of Jesus and Mary in Delhi. She earned a Mathematics degree from St. Stephen’s College and an MBA from IIM Ahmedabad. Her corporate career began in 1989 at ICICI Bank, where she worked in sales, marketing, and product development. She also held leadership positions at ICICI Securities and Greater Pacific Capital in Singapore.

At SEBI, Buch is known for decisive actions in cases involving regulatory violations, like her order against the Sahara Group in 2018, demanding the return of investor funds. She also led investigations into insider trading and unfair practices, enforcing strict actions. Buch’s leadership focuses on technology, data, and accountability.

In March 2022, Buch was appointed as SEBI chairperson, implementing significant reforms. She introduced key result areas (KRAs), emphasized cyber security and technology in market regulation, and sought additional powers to monitor social media to prevent market manipulation, aiming to adapt to the evolving market while maintaining transparency and fairness.

Buch’s personal life is noteworthy. At 21, she married Dhawal Buch, a Unilever director, and they have a son named Abhay. She credits her family, especially her husband, for supporting her career. Buch is also a survivor of the 26/11 Mumbai terrorist attacks, which have deeply affected her.

Hindenburg alleges SEBI-Adani conflict

Hindenburg stated that potential conflicts of interest and questioned SEBI’s objectivity in the Adani matter. The short-seller called for further investigation and transparency, suggesting SEBI’s reluctance to act against the Adani Group may be linked to its chairperson’s involvement in the same offshore funds as Vinod Adani.

Reacting to the report, Shiv Sena (UBT) leader Priyanka Chaturvedi said, "Now we know why our letters went unanswered."

Hindenburg's fresh claims follow a hint about a new revelation involving an Indian company, teased on social media with the message, "Something big soon India."

In January 2023, Hindenburg accused billionaire Gautam Adani's conglomerate of stock market manipulation and financial misconduct, which Adani denied.

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