Attack on Sebi’s integrity, bid to malign me: Madhabi Puri Buch junks Hindenburg charge

Tribune News Service

New Delhi, August 11

Dismissing allegations made by US-based short-seller Hindenburg Research, Madhabi Puri Buch, Chairperson of the Securities and Exchange Board of India (Sebi), on Sunday denied any wrongdoing.

Hindenburg had, in a report released on Saturday, made serious allegations regarding the involvement of Buch and her husband Dhaval Buch, a senior adviser with Blackstone, in a Mauritius-based offshore fund, IPE Plus Fund 1, which allegedly received investments from a Bermuda-based fund tied to Vinod Adani, the elder brother of billionaire Gautam Adani.

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In a two-page statement, the Buchs clarified on the raft of allegations. “They have chosen to attack the credibility of Sebi and attempt character assassination of the Sebi Chairperson,” the statement read.

In its first comments following the new report by Hindenburg, Sebi said allegations against the Adani Group had been “duly investigated” and Chairperson Buch disclosed and recused herself from time to time when dealing with matters.

The regulator said the investigation in only one of the 26 aspects it was probing was pending and the same was close to completion. Buch has made “relevant disclosures” from time to time, and recused herself in matters involving potential conflicts of interest, Sebi said.

Separately, the Adani Group, in a filing to the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), said “The latest allegations by Hindenburg are malicious, mischievous and manipulative selections of publicly available information to arrive at pre-determined conclusions for personal profiteering with wanton disregard for facts and the law.” It was a calculated and deliberate effort to malign our standing, the group said.

The statement by the Buchs described the insinuations about their financial status and investments, especially in relation to Madhabi’s current salary from Sebi, as “malicious and motivated”. The release said from 2010 to 2019, Dhaval Buch lived in London and Singapore while working with Unilever. Madhabi also lived and worked in Singapore from 2011 to March 2017, first as an employee of a private equity firm and later as a consultant. The couple clarified that their investment in the fund mentioned (IPE Plus Fund 1) by Hindenburg was made in 2015 when they both were private citizens residing in Singapore, nearly two years before Madhabi joined Sebi.

According to the statement, their decision to invest in the fund was based on the fact that chief investment officer Anil Ahuja was a long-time friend of Dhaval’s from school and IIT-Delhi.

The statement said, “When in 2018, Ahuja left his position as CIO of the fund, we redeemed the investment.” At no point did the fund invest in any bonds, equities or derivatives of any Adani Group company.

The release addressed Dhaval’s appointment as a senior adviser to Blackstone Private Equity in 2019. The couple clarified this role was due to Dhaval’s expertise in supply chain management and was publicly known long before Madhabi became Sebi Chairperson. “On his appointment, Blackstone Group was immediately added to Madhabi’s ‘recusal list’ maintained with Sebi,” the statement said, ensuring there was no conflict of interest.

The couple rejected insinuations that any regulations related to the REIT industry were favours to specific parties, labelling these claims as “malicious and motivated”. The statement also touched on two consulting companies Madhabi had set up during her time in Singapore. “These companies became immediately dormant on her appointment with Sebi, and all relevant disclosures were made to Sebi,” the statement read.

Dhaval retired from Unilever in 2019, but continued his consultancy practice through these companies, working with prominent clients in India.

The couple’s statement said Hindenburg chose to attack their credibility instead of responding to the show-cause notice served to it for various violations in India. “It is unfortunate that instead of replying to the notice, they have chosen to attack the credibility of Sebi and attempt character assassination of the Chairperson”.

Meanwhile, fund management company 360 ONE Asset Management also filed its version with the BSE and the NSE, saying the IPE Plus Fund 1 was a fully compliant and regulated fund. It was launched in October 2013 and operated until October 2019. “Throughout the fund’s tenure, it made zero investment in any shares of the Adani Group either directly or indirectly through any fund,” it said.

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

Irrelevant deals

Buch clarifies their investment in fund flagged by Hindenburg was made in 2015 when she was residing in Singapore, nearly two years before joining Sebi