Hindenburg claims the head of India’s market regulator had stakes in offshore funds used by the Adani Group

MUMBAI (Reuters) – U.S.-based short seller Hindenburg Research said in a new report on Saturday that the chairman of India’s market regulator, Madhabi Puri Buch, previously held investments in certain offshore funds that have were also used by the Adani group.

Buch did not immediately respond to a call and a WhatsApp message. The market regulator also did not immediately respond to an email seeking comment.

Citing whistleblower documents, Hindenburg said Buch and her husband held stakes in an offshore fund in which a substantial amount of money was invested by associates of Vinod Adani, the brother of Gautam Adani, who is chairman of the Adani group of companies.

In January 2023, Hindenburg published a report alleging misuse of tax havens and stock manipulation by the Adani group, prompting a $150 billion sale of the conglomerate’s shares, despite his denials of wrongdoing. Since then, stocks have partially recovered.

The 2023 report also led to an investigation by the country’s market regulator, the Securities and Exchange Board of India (SEBI), which is still ongoing. In May, six Adani group companies disclosed that they had received notices from SEBI alleging violation of India’s stock market rules.

In addition to the probe into the Adani group, SEBI has issued a “show cause” notice to Hindenburg Research, alleging that the short seller violated the country’s rules by setting up a short-bet using non-public information.

Hindenburg Research said the allegations were “nonsense” in a note published on its website in July, which made and published the regulator’s notice.

In his latest report, Hindenburg seeks to draw a link between offshore funds that trade Adani Group shares and the personal investments of Buch and her husband.

The Bermuda-based Global Opportunities Fund, which a Financial Times investigation found was used by entities linked to the Adani group to trade shares in group companies, is said to have had sub-funds.

Buch and her husband were investors in one of those sub-funds in 2015, Hindenburg claimed, citing whistleblower documents.

In 2017, before Buch was appointed a full-time member, the second-highest office at the Securities and Exchange Board of India (SEBI), her husband requested to be the sole operator of the account, Hindenburg said, citing whistleblower documents .

Later, in 2022, she was appointed head of the regulatory body.

“We believe our findings raise questions that deserve further investigation. We welcome the additional transparency,” Hindenburg said.

(Reporting by Jayshree.P. Upadhyay and Ira Dugal in Mumbai; Editing by Alex Richardson and Christina Fincher)