An application filed in the Supreme Court on Tuesday (August 13, 2024) has intensified the ongoing scrutiny of SEBI Chairperson Madhabi Buch, following new allegations by Hindenburg Research. The petition, filed by advocate Vishal Tiwari, asserts that the recent claims create an "atmosphere of doubt" and urges the court to expedite and conclude its investigation into the Adani Group.
Background: SEBI's Incomplete Investigations
In a previous judgement on January 3, the Supreme Court mandated the Securities and Exchange Board of India (SEBI) to complete 24 investigations into Hindenburg’s initial allegations against the Adani Group within three months. To date, SEBI has concluded 22 of these investigations, with the remaining two awaiting input from external agencies. The new application argues for a fixed deadline to finalise these pending probes, citing the public interest and the rights of investors who suffered financial losses following the 2023 Hindenburg report on the Adani Group.
For more on this, click : Supreme Court denies SEBI's request for a six-month extension to complete Adani-Hindenburg probe
The Latest Revelations
Hindenburg Research’s latest report accuses Ms. Buch and her husband of having stakes in offshore funds implicated in the Adani Group's alleged money-syphoning operations. The report, based on whistleblower documents, suggests that Ms. Buch and her husband were involved in offshore Bermuda and Mauritius funds, allegedly controlled by Vinod Adani, the elder brother of Adani Group chairman Gautam Adani. These funds were reportedly used for round-tripping funds and inflating stock prices.
Details of the allegations
According to the report, a declaration of funds signed by a principal at IIFL indicated that the source of investment was “salary,” with the couple’s net worth estimated at $10 million. Furthermore, an email from March 22, 2017, allegedly showed Ms. Buch’s husband requesting to be the sole operator of accounts linked to the Mauritius fund, just weeks before her appointment as SEBI chairperson. Another account statement from February 2018, addressed to Ms. Buch’s private email, reportedly revealed the structure of these funds, including GDOF Cell 90 (IPEplus Fund 1)—the same cell linked to Mr. Vinod Adani.
For more details, click : Hindenburg vs. SEBI: Fresh Allegations Rock Indian Stock Market
Response and Implications
Ms. Buch has categorically denied the allegations, dismissing them as baseless. The court has also maintained that third-party reports should not influence its decisions. However, Mr. Tiwari’s application stresses that the revelations have generated significant public and investor doubt, necessitating a prompt and transparent conclusion to the investigations.
VIDEO | “As per the directions of the Supreme Court, SEBI was directed to conduct its investigation within a period of three months and those directions were issued on January 3, 2024, but till now SEBI has not placed anything on record. Again Hindenburg has levied allegations… pic.twitter.com/NSAEZQhJ9k— Press Trust of India (@PTI_News) August 13, 2024
Congress Announces Nationwide Protest Demanding SEBI Chief’s Resignation
In the wake of escalating tensions over Hindenburg Research’s allegations, the Congress party has announced a nationwide protest scheduled for August 22. The demonstration will demand the resignation of SEBI Chairperson Madhabi Puri Buch and call for a Joint Parliamentary Committee (JPC) probe into the Adani Group scandal.
The decision to stage a nationwide agitation was made following a high-level meeting led by Congress president Mallikarjun Kharge. The meeting, attended by general secretaries, state unit chiefs, and AICC state in-charges, focused on organisational matters and strategizing for upcoming assembly polls, along addressing critical national issues.
Kharge emphasised the need for a comprehensive investigation into the alleged connections between SEBI and the Adani Group. "The shocking revelations of a nexus between the SEBI and Adani need a thorough investigation. The money of small investors in the stock market cannot be jeopardized," Kharge stated in a post on X after the meeting.
Conclusion
The unfolding situation underscores the critical need for regulatory transparency and accountability. As the Supreme Court deliberates on the latest developments, the final outcomes of SEBI's investigations will be crucial in restoring investor confidence and maintaining the integrity of India's financial markets.
Inputs by Agencies
Image Source: Multiple Agencies
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