Hindenburg Shakes India with New Adani Allegations
The ongoing saga between US short-seller Hindenburg Research and India’s Adani Group has taken a dramatic new turn with allegations that the chair of the country’s securities regulator, Madhabi Buch, held stakes in offshore funds linked to the Adani family.
Hindenburg, in a bombshell report released on Saturday, claimed that Buch and her husband had “hidden” holdings in Bermuda and Mauritius entities connected to Vinod Adani, the older brother of Adani Group founder Gautam Adani. The short seller alleged that these investments compromised Buch’s ability to impartially investigate the Adani Group for potential financial irregularities.
The allegations have sent shockwaves through India’s financial circles and reignited concerns about the independence of the Securities and Exchange Board of India (SEBI). Hindenburg’s report comes amid multiple, long-running probes into the Adani Group, which have yet to yield public findings.
Buch and her husband vehemently denied the allegations, asserting that their finances are an “open book” and that all required disclosures have been made to SEBI. They claimed the investments were made in 2015, two years before Buch joined the regulator.
The Adani Group also dismissed the allegations as “malicious, mischievous, and manipulative,” stating that their overseas holding structure is fully transparent.
A History of Conflict
The latest salvo from Hindenburg marks a fresh chapter in the high-stakes battle between the short-seller and the Adani Group. In January 2023, Hindenburg accused the conglomerate of stock manipulation, accounting fraud, and money laundering, triggering a dramatic decline in Adani’s share prices.
SEBI subsequently launched multiple investigations into the Adani Group, while also issuing a notice to Hindenburg alleging unfair trade practices. The short seller has denied these allegations.
Potential Implications
The new allegations against Buch have raised serious questions about the integrity of the regulatory process in India. If proven true, the claims could undermine public confidence in SEBI and its ability to act independently.
The opposition Congress party has seized on the opportunity to attack the government, alleging a conflict of interest and demanding a thorough investigation.
The Adani Group, already facing intense scrutiny, now finds itself in an even more precarious position. The fresh allegations could further erode investor confidence and hinder the conglomerate’s expansion plans.
