Jairam Ramesh said Sebi’s strange reluctance to investigate the Adani mega scam has been noted for some time. (File Photo)
Constituents of opposition bloc INDIA on Sunday demanded a joint parliamentary committee (JPC) probe into allegations by US-based short-seller Hindenburg Research against Sebi chairperson Madhabi Puri Buch and her husband Dhaval Buch.
In its latest report on Saturday, Hindenburg Research said Madhabi and Dhaval had investments in the same offshore entity that was allegedly used to inflate Adani Group’s share prices.
Congress general secretary (communications) Jairam Ramesh, in a statement on behalf of his party, said Sebi’s “strange reluctance to investigate the Adani mega scam has been noted for a long time,” including by the Supreme Court’s Expert Committee. The committee, he said, had noted that Sebi in 2018 diluted and in 2019 completely removed reporting requirements related to ultimate (i.e. real) beneficial ownership of foreign funds.
“This has tied its hands to the extent that ‘the securities market regulator suspects irregularities but also finds compliance with various stipulations in the relevant regulations… It is this dichotomy that has led to Sebi drawing a blank across the globe’,” Ramesh was quoted as saying by the Expert Committee.
Under public pressure, after Adani’s horse bolted, the Sebi board re-introduced stricter reporting norms on June 28, 2023. On August 25, 2023, it informed the Expert Committee that it was investigating 13 suspicious transactions. However, the investigations never bore fruit, the senior Congress leader added.
He said Hindenburg Research’s revelations show Madhabi and her husband invested in the same offshore funds based in Bermuda and Mauritius in which “Vinod Adani and his close associates Chang Chung-Ling and Nasser Ali Shahban Ahli invested funds obtained from overcharging of electrical equipment.”
“These funds are also believed to have been used to accumulate large stakes in Adani Group companies, in violation of Sebi norms. It is surprising that Buch has a financial stake in these same funds,” Ramesh said.
“This raises fresh questions about Gautam Adani’s two meetings in 2022 in quick succession with Buch soon after she became the Sebi chairperson. Recall that Sebi was supposedly investigating Adani’s transactions at that time,” Ramesh said, demanding that the government act immediately to remove all conflicts of interest in Sebi’s probe into the Adani Group. “The fact remains that the apparent complicity of the highest officials of the country can only be resolved by setting up a JPC to investigate the full extent of the Adani mega scam,” he said.
Opposition parties also accused the government of ending the parliamentary session on the budget a day early for fear of backlash over the issue. The budget session was scheduled to end on Monday but concluded on Friday.
“When Parliament does not function, who is the biggest beneficiary?” asked Trinamool Congress Rajya Sabha leader Derek O’Brien. The beneficiary is the government, which is why Prime Minister Narendra Modi’s “unstable coalition” disrupted the Parliament session once again, he said, adding that parties in the INDIA alliance would have held the government accountable on Monday.
Trinamool Lok Sabha member Mahua Moitra said the Hindenburg Research report was proof of “crony capitalism at its finest”. In a post on X, she asked whether the Central Bureau of Investigation (CBI) and the Enforcement Directorate will file cases under the Prevention of Corruption Act and the Prevention of Money Laundering Act.
“A simple point: the president who has invested in (and personally interacted with) the very funds that need investigation, is at the head of (the) organization charged with (the) fiduciary responsibility of finding other owners of the fund and he tells (the) Supreme Court and its six-member committee that he had not obtained any results and that it was a ‘chicken and egg’ situation in his investigation into the ‘ownership’ of 13 entities. What greater conflict of interest and mockery of justice can there be?” Moitra asked.
Shiv Sena (UBT) Rajya Sabha MP Priyanka Chaturvedi said the Hindenburg Research report showed the extent of support that top BJP leaders had extended to their favourite industrialist.
Even institutions like Sebi were diluted by the appointment of allegedly compromised individuals, he said. “The circle of quid pro quo is getting wider and the modus operandi more sinister,” he added.
Buch and her husband Dhaval have rejected the report’s allegations, calling them “baseless accusations and insinuations.” “There is no truth to them. Our lives and finances are an open book,” they said in a joint statement.
First published: August 11, 2024 | 15:17 IS
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