“The current head of SEBI and his wife, Dhaval Buch, have hidden shares in the same offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani,” Hindenburg said in a report published on his website.
Dubai-based Vinod is the elder brother of Gautam Adani and is said to have used the structure to invest in the Indian market with funds allegedly siphoned from electrical equipment bills to the Adani Group.
The report, citing whistleblower documents, states that Buchs appears to have opened an account with IPE Plus Fund 1 on June 5, 2015 in Singapore. The offshore Mauritius fund is said to have been set up by Adani directors through IIFL and registered in the tax haven of Mauritius.
“Besides being used as an alleged funnel for Vinod Adani’s money, the small fund has close ties to Adani. The founder and Chief Investment Officer (CIO) of IPE Plus Fund is Anil Ahuja, according to his biography. At the same time, Ahuja was a director of Adani Enterprises where he served for three terms spanning nine years ending in June 2017, according to his biography and exchange disclosure before he became a director of Adani Power,” said Hindenburg. without the risk of serious regulatory intervention can be “explained through Adani’s relationship with SEBI Chairman Madhabi Buch.” The Bermuda and Mauritius funds, found in the same complex nested structure, are used by Vinod Adani,” said Hindenburg.
The whistleblower stated that a company controlled by Vinod Adani had invested in the “Global Dynamic Opportunities Fund” (“GDOF”) in Bermuda, a British overseas territory and tax haven, which in turn invested in the IPE Plus Fund 1.
A separate investigation by the Financial Times revealed that the GDOF holding fund was used by two Adani associates “to accumulate and trade large positions in Adani Group shares”.
Hindenburg said Sebi’s “reluctance to take substantive action against suspected offshore shareholders in the Adani Group may be due to Buch’s involvement in using the same funds used by Vinod Adani”.
The US-based short sellers also produced copies of records from the Ministry of Corporate Affairs which clearly show that the Sebi chief owns 99% stake in a consultancy business called Agora Advisory, where his wife is a director.
“In 2022, this entity reported $261,000 from consulting, 4.4 times the salary disclosed to SEBI,” the report said, adding that offshore Singapore entities are exempt from disclosing financial statements so it is unclear how much revenue they get from consulting. business and from whom.
“In short, although there are thousands of Indian mutual fund products in the famous mainland, the industry is now responsible for regulating, documents show SEBI Chairman Madhabi Buch and his wife have shares in a multi-layer offshore fund structure with small assets. , across risky jurisdictions known high, supervised by a company linked to the Wirecard scandal, in the same entity managed by Adani directors and used significantly by Vinod Adani in the Adani cash siphoning scandal,” the report said.
Pointing out that Sebi did not act against other suspected shareholders of Adani operated by India Infoline: EM Resurgent Fund and Emerging India Focus fund, he said: “If Sebi really wants to find offshore fund holders, perhaps the Sebi chairman can start by looking in the mirror .We are not surprised that Sebi is not willing to follow in the footsteps of its own chairman.
The wife of Sebi chief Dhaval Buch, Hindenburg said when she was a senior adviser at Blackstone, the regulator gave the nod to the IPO of two REITS backed by PE firms – Mindspace and Nexus Select Trust.
“During Dhaval Buch’s tenure as Blackstone’s advisor, Sebi has proposed, approved and facilitated major reit regulatory changes. These include 7 consultation papers, 3 consolidated updates, 2 new regulatory frameworks and unit nomination rights, specifically for private equity firms like Blackstone, “said Hindenburg.
“During an industry conference, Sebi chairman Madhabi Buch had touted REITs as his “favorite product for the future” and asked investors to look “positively” at the asset class. While making the statement, he did not mention that Blackstone, which his wife advised, was making a profit significantly from the asset class,” he said.
In Agora Advisory, which is said to be 99% owned by Madhabi Buch, the company generated revenue of Rs 19.8 million from consultancy, which is 4.4 times Madhabi Buch’s salary before he was disclosed as a Whole-Time member of SEBI.
Citing the data, Hindenburg said the Sebi regulator cannot be trusted as an objective arbiter in the Adani issue and that what follows from this report will contribute to the causes that support free expression.
ET has written to Sebi seeking its comments on the allegations. His response was awaited.