SEBI on Sunday said it has completed all but one probe into allegations against the Adani Group, responding to allegations that a probe by US short-seller Hindenburg Research was moving slowly, possibly because of the company's The chairman invested in funds at the heart of the investigation.
The regulator said in a statement that Hindenburg's accusations of using offshore investment funds to drive up share prices and failing to disclose related party interests, first raised in its damning report against the Adani Group in January 2023, had been “received by SEBI.” Proper investigation”. statement.
SEBI said that when the Supreme Court last passed an order on the issue in January this year, two of the 24 investigations against the Adani Group were pending. Subsequently, one investigation has been completed and the remaining investigation is nearing completion.
During the course of the investigation, more than 100 subpoenas were allegedly issued and more than 300 documents containing approximately 12,000 pages were examined.
After the investigation was completed, SEBI initiated quasi-judicial enforcement proceedings, including issuing notices and holding hearings before the order was passed, which were public, the regulator said, without disclosing the content of the investigation into Adani.
SEBI said that as a matter of policy it does not comment on any investigation/ongoing enforcement matters.
Hindenburg claimed on Saturday that SEBI chairman Madhabi Puri Buch and her husband had made undisclosed investments in offshore funds in Bermuda and Mauritius, allegedly by group chairman Gautam Ada Vinod Adani, the elder brother of Gautam Adani, used these entities to funnel money and inflate his money.
In a joint statement, Madabi Puri Buch and her husband Dhawal Buch strongly denied the “baseless allegations and insinuations made in the report,” saying the allegations had “no basis in fact.”
SEBI also defended its chairman. In a two-page statement, the company said Bucher had made relevant disclosures from time to time and that she had “also recused herself from matters involving potential conflicts of interest.” The Adani Group also denied having any business dealings with the SEBI chief, while wealth management entity 360ONE (formerly IIFL Wealth Management) separately said Buch and her husband Dhaval Buch’s investment in IPE-Plus Fund 1 was less than 1.5% of the total inflows. % and has not made any investment in Adani Group shares.
Bux said the investments were made in 2015, long before her appointment as a full-time member of SEBI in 2017 and her subsequent promotion to chairman in March 2022, and in her capacity as a “private citizen residing in Singapore” .
According to the statement, investments in the two funds were made on the advice of Dawar's childhood friend Anil Ahuja, who the Hindenburg report said was the owner of the Mauritius IPE Plus fund Founder and Chief Investment Officer (CIO).
The Adani Group also said in a statement that Ahuja was a nominee of Adani Power's 3i Investment Fund (2007-2008) and served as a director of Adani Enterprises for three terms for a nine-year term until June 2017.
SEBI in October 2020 began an investigation into 13 opaque offshore entities holding 14% to 20% stake in five publicly traded stocks of the group to determine whether foreign investors are genuine public shareholders or act as Promoter's cover.
Citing “whistleblower documents”, Hindenburg said on Saturday that the SEBI chairman and her husband invested in offshore entities that were allegedly part of a fund structure managed by India Infoline, which also included Vinod Adani. Participated in the investment of this fund structure.
It said the Bermuda-based Global Opportunities Fund had sub-funds that were allegedly used by entities linked to the Adani Group to trade shares in group companies. In 2015, Bucher and her husband were investors in one of the sub-funds.
Hindenburg claimed that SEBI “has shown a surprising lack of interest in Adani's alleged undisclosed Mauritius network and offshore shell entities”. Bux said Hindenburg had been served a show-cause notice for “various offenses taking place in India”. In a June 26 show-cause notice, SEBI accused Hindenburg of “deliberately sensationalizing and misrepresenting certain facts” in a January 2023 report that accused the Adani Group of using a network of companies in tax havens to inflate its prices , thus carrying out “the biggest scam in corporate history”, controlling revenue and manipulating stock prices even as debt continues to mount.
“Unfortunately, instead of responding to the show-cause notice, they chose to attack SEBI's credibility and attempt to cast aspersions on the character of the SEBI Chairman,” Bux said in the statement.
SEBI said the proceedings before Hindenburg are ongoing and “are being dealt with in accordance with established procedures and adhering to the principles of natural justice.” Bux further said they would not hesitate to submit the documents to any authority that may seek them Disclose any and all financial documents, including those relating to our period as a strictly private citizen.
However, the statement did not discuss Hindenburg's concerns about the incompleteness of SEBI's investigation into Adani.
Separately, Adani Group Inc., in the same regulatory filing, called Hindenburg's accusations a “malicious, mischievous and manipulative choice to disclose information to reach a predetermined conclusion for personal gain and with a wanton disregard for the facts and the law.” The statement said. “The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this deliberate attempt to damage our reputation,” the company wrote. “We remain firmly committed to transparency and complying with all legal and regulatory requirements.”
It denies the accusations, saying they are nothing more than a “repetition of discredited allegations that were thoroughly investigated, proven to be baseless and dismissed by the Supreme Court in March 2023”. “We reiterate that our overseas holding structure is fully transparent and all relevant details are regularly disclosed in numerous public documents,” the Adani Group said, adding that Anil Ahuja is Adani's Nominated Director of Adani Power 3i Investment Fund (2007-2008) and later Director of Adani Enterprises until 2017.
It added: “For a disgraced short seller under the scanner for multiple violations of Indian securities laws, Hindenburg's allegations are nothing more than a diversion thrown out by a desperate entity with total contempt for Indian law. thing.
Hindenburg said Buch and her husband may have first opened an IPE Plus Fund 1 account in Singapore on June 5, 2015. The IPE fund is a small offshore Mauritius fund created by Adani directors through India Infoline (IIFL), a wealth management company linked to the Wirecard corruption scandal.
Hindenburg claimed: “Gautam Adani's brother Vinod Adani used this structure to invest in the Indian market, with funds allegedly misappropriated from the Adani Group's high invoices for power equipment.”
Reacting to Hindenburg's allegations, Congress said the revelations would only strengthen its demand for a “joint parliamentary committee to comprehensively investigate the Adani mega-scam”, while the Trinamool Congress said the SEBI chief must resign.
Left parties also support the demand for the establishment of a JPC.
Congress president Mallikarjun Kharge said the Securities and Exchange Board of India (SEBI) had previously gone to the Supreme Court to acquit Adani after the Hindenburg report came to light in January 2023. However, he said fresh allegations of “quid pro quo” involving SEBI chiefs have surfaced, requiring the government to take action on it.
The BJP hit back at the opposition, saying they were part of a conspiracy to create financial instability and chaos in India, and rejected Hindenburg's accusations against the SEBI chairman that it was trying to discredit the financial regulator.
Although Adani Group strongly denies all allegations in Hindenburg's January 2023 report, Hindenburg has shorted or shorted companies such as electric truck maker Nikola Corp and Twitter in the past, which caused the group's share price to plummet against the US dollar. The market value of the 10 listed companies that fell was the lowest at 150 billion. Most of the 10 listed companies have turned losses into profits.
After the Hindenburg report, the Supreme Court asked market regulator SEBI to complete its investigation and set up a separate panel to look into regulatory errors. The panel did not file any adverse report against Adani and the Supreme Court also said that no other investigation was required apart from the one conducted by SEBI.
On June 26 this year, SEBI accused Hindenburg in a show-cause notice of “deliberately sensationalizing and distorting certain facts” and collaborating with a New York hedge fund to make bets.
Hindenburg responded by saying it had made just $4.1 million from its declared position in Adani shares and criticized the regulator for not focusing its investigation on the January 2023 report, which “provided evidence” , revealed that the group created “a vast network of offshore shell entities” and “secretly moved billions of dollars in and out of Adani public and private entities.”
Hindenburg claimed on Saturday that just weeks before Buch was appointed to SEBI, her husband asked that their investments be transferred to his sole control, possibly to avoid the risks associated with her new regulatory role. Any review.
The couple's investment was reportedly made through a complex, multi-layered offshore structure, raising questions about its legality and purpose.
Regarding investments in the two offshore entities, the duo said in the statement that these entities had become “dormant” after her appointment by SEBI, adding that her shareholdings in the two entities had also Disclosed to SEBI.
On March 22, 2017, Hindenburg, who was in charge of Dhaval Buch, just weeks before his wife was appointed as a full-time member of SEBI, wrote to Mauritius fund manager Trident Trust asking that he be the “only authorized person operating the account,” the duo said. “This was again disclosed when the equity stake in the Singapore entity was transferred to Dhaval, not only to SEBI but also to the Singapore authorities and the Indian tax authorities,” it said, adding that Sebi in the disclosure and have strong institutional mechanisms for avoiding norms.
(This report has not been edited by News18 staff and is published from associated news agency – PTI)
