Hindenburg allegations: Sebi chief gets backing of REIT and alternate capital industry bodies
Mumbai, August 12
Industry bodies representing the Real estate investments trusts (REITs) and alternate capital on Monday came in support of embattled Sebi chief Madhabi Puri Buch facing allegations by US short-seller Hindenburg Research of having stakes in obscure offshore funds linked to Adani group.
Indian REITs Association (IRA) said that claims made by the US-based short-seller suggesting that the REIT framework made by markets regulator Sebi serves the interests of a select few are “baseless and misleading”.
In fact, the association has commended Sebi and its leadership for crafting a “rigorous regulatory environment” that includes comprehensive periodic reporting requirements, mandatory independent valuations, and strict governance standards.
“Developed in consultation with all market participants, this framework ensures the highest levels of investor protection for both -- domestic and international institutional investors, as well as retail investors,” it said.
The Indian Venture and Alternate Capital Association (IVCA) also said it stands firmly behind Buch in the “challenging times” and added that the markets regulator has shown an “unwavering commitment to market integrity, regulatory governance, and investor protection”.
The support from the two bodies comes a day after mutual fund lobby grouping Amfi (Association of Mutual Funds in India) on Sunday backed Buch, saying the short-seller's report is an attempt to undermine Buch's contribution to the Indian capital market and the country's economic progress.
“Creating a trust deficit in the market ecosystem must be seen for what they truly are -- attempts to create sensation by connecting random events done in the past,” the industry body said.
Hindenburg Research on Saturday launched a broadside against the Sebi chairperson, alleging she and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal.
The short-seller alleged that Buch and her husband Dhaval Buch had invested in one of the funds which was allegedly being used by Vinod Adani-- elder brother of Adani Group's Gautam Adani. It also flagged Dhaval's association with private equity major Blackstone, a promoter of multiple real estate investment trusts (REITs) and Sebi's continued pitch for the new investment avenue.
Buch and her husband denied the allegations as baseless and asserted their finances are an open book.
Securities and Exchange Board of India (Sebi) too defended its chairperson, saying Buch had made relevant disclosures from time to time and she “had also recused herself in matters involving potential conflicts of interest.” Sebi has said that only one among 24 investigations into the Adani Group are pending.
The Adani Group has termed the latest allegations malicious and based on manipulation of select public information. The company said it has no commercial relationship with the Sebi chairperson or her husband.
Without naming Hindenburg, an IRA statement said, “Recent claims suggesting that the REIT framework serves the interests of a select few are baseless and misleading.”
The statement said after coming into being in 2014, there are four listed REITs at present managing assets of over Rs 1.4 lakh crore and serving over 2.4 lakh unitholders.
Prominent global institutional investors have invested in REITs, it said, adding that their participation strengthens the trust and credibility of India's financial system.
In its statement, the IVCA said Sebi plays a crucial role in maintaining the integrity and stability of our financial ecosystem.
“We believe that the recent allegations made by Hindenburg are unwarranted and do not reflect a deep understanding of the Indian regulatory environment,” it added.
