What are serious allegations Hindenburg Research made against SEBI’s chairperson?

New Delhi: Hindenburg Research, the US-based short-selling firm, leveled serious accusations against the Securities and Exchange Board of India (SEBI) and its Chairperson, Madhabi Buch On Saturday. According to Hindenburg, despite their previous report on the Adani Group, SEBI has yet to take any substantive action against the conglomerate. The firm alleges that whistleblower documents reveal both Buch and her husband held stakes in offshore funds linked to the Adani money siphoning scandal.

SEBI’s response and show cause notice

Hindenburg Research previously hinted at major developments in India via their X (formerly Twitter) account. Their latest report criticizes SEBI for failing to act against the Adani Group while instead issuing a show-cause notice to Hindenburg on June 27. This notice, the firm claims, did not address any factual inaccuracies in their comprehensive 106-page analysis but criticized the adequacy of their short position disclosure. SEBI also alleged that Hindenburg’s report was misleading, citing a banned broker with past SEBI experience as a source of the information. The notice further accused SEBI of complicity in Adani's alleged rule violations.

NEW FROM US:

Whistleblower Documents Reveal SEBI’s Chairperson Had Stake In Obscure Offshore Entities Used In Adani Money Siphoning Scandalhttps://t.co/3ULOLxxhkU

— Hindenburg Research (@HindenburgRes) August 10, 2024

Hindenburg Research first exposed the Adani Group on January 24, 2023, leading to a significant drop in the company's share prices, though they later rebounded. SEBI responded with a 46-page show-cause notice regarding the report. In a blog post dated July 1, 2024, Hindenburg addressed SEBI's allegations, asserting that their report was designed to highlight critical issues, not to mislead. The firm’s response included further accusations against SEBI, raising questions about the regulator's integrity and actions.