Hindenburg Research on Saturday launched a direct attack on Chairperson of the Securities Exchange Board of India, Madhabi Puri Buch, alleging that she and her husband held stake in offshore funds that had links to entities involved in the alleged Adani cash siphoning scandal.
In its latest report published by Hindenburg, the hedge fund said “despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry she now is responsible for regulating, documents show SEBI Chairperson Madhabi Buch 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.”
Hindenburg Research has made the new allegations based on documents shared by a whistleblower and investigations carried out by other entities. For instance, investigation by non-profit project Adani Watch in December 2023 showed how a web of offshore entities, controlled by Gautam Adani’s brother, Vinod Adani, were recipients of funds from the alleged over-invoicing of power equipment. In one complex structure, a Vinod Adani controlled company had invested in “Global Dynamic Opportunities Fund” (“GDOF”) in Bermuda, a British overseas territory and tax haven, which then invested in IPE Plus Fund 1, a fund registered in Mauritius, another tax haven.
“What we hadn’t realised: 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. Madhabi Buch and her husband Dhaval Buch first appear to have opened their account with IPE Plus Fund 1 on June 5th, 2015 in Singapore, per whistleblower documents,” the new report by Hindenburg said.
“A declaration of funds, signed by a principal at IIFL states that the source of the investment is “salary” and the couple´s net worth is estimated at $10 million. Madhabi Buch was appointed a “Whole Time Member” of SEBI in April 2017. On March 22nd, 2017, just weeks ahead of that politically sensitive appointment, Madhabi’s husband, Dhaval Buch, wrote to Mauritius fund administrator Trident Trust, according to documents we received from a whistleblower. The email was regarding his and his wife’s investment in the Global Dynamic Opportunities Fund,” it added.
In the letter, Dhaval Buch requested to “be the sole person authorised to operate the Accounts”, seemingly moving the assets out of his wife’s name ahead of the politically sensitive appointment.
“Later, on February 25th, 2018, during Buch’s tenure as a Whole-Time Member of SEBI, whistleblower documents show she personally wrote to India Infoline using her private Gmail account, doing business through her husband’s name, to redeem the units in the fund,” Hindenburg said in the report.
The report has cited another instance of Buch’s ownership in offshore funds. On March 27, 2013, Agora Partners Pte Ltd was registered in Singapore. It describes itself as a “business and management consultancy”, per a Singapore director search. At the time, Madhabi Buch was disclosed as a 100% shareholder, according to the report.
Buch remained a 100% shareholder of Agora Partners until March 16, 2022, per Singaporean records.
“Likely realising the political sensitivity of such a conflict of interest, were it ever revealed, she transferred her stake in Agora Partners to her husband, Dhaval Buch per Singaporean share transfer details,” it said.
“This is especially important given the direct email evidence presented earlier showing SEBI’s Chairperson, Madhabi Buch, having done business via private email through her husband’s name in offshore fund entities,” the report said.