Sprawling Indian conglomerate Adani Group has once again found itself under selling pressure following a fresh bout of allegations levelled by New York short seller Hindenburg Research over the weekend.
As much as $19 billion in market value was erased from Adani’s share price after Hindenburg alleged that the chairperson of India’s securities regulator held a stake in “obscure offshore entities” linked to Adani’s operations.
According to Hindenburg, SEBI chair Madhabi Buch and her husband had hidden stakes in offshore funds linked to the Adani Group's alleged money laundering activities.
Hindenburg’s report suggests a conflict of interest, as SEBI has shown leniency in investigating the Adani Group following the short seller’s explosive attack on Adani 18 months ago.
In January 2022, Hindenburg published damning allegations of “brazen accounting fraud, stock manipulation and money laundering”.
Some $50 billion was immediately wiped from Adani’s market valuation following the report. While the following years have seen a recovery, these fresh allegations have thrown another curveball.
Buch responds
Buch swiftly sought to downplay Hindenburg’s latest claims, stating that “SEBI has strong institutional mechanisms of disclosure and recusal norms as per the code of conduct applicable to its officers”.
“Accordingly, all disclosures and recusals have been diligently followed, including disclosures of all securities held or subsequently transferred,” she added in a statement.
Though Buch confirmed the investment made by her and her husband at the core of Hindenburg’s allegations, she said the investment “was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI”.
Hindenburg was far from satisfied with this response, writing on Twitter/X: “SEBI was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms Buch WAS PERSONALLY INVESTED IN and funds by the same sponsor which were specifically highlighted in our original report.
“This is obviously a massive conflict of interest.”
Adani Group shares recouped a fair chunk of their losses towards the end of India’s trading session, though they remain around 20% lower since before Hindenburg’s initial offensive 18 months ago.