SEBI, in a statement, clarified that “the allegations made by Hindenburg Research against the Adani Group have been duly investigated by SEBI,” and the Supreme Court noted in its order dated January 3, 2024, that 22 of the 24 investigations had been completed. By March 2024, another investigation was finalized and the remaining investigation is nearing completion.
The Hindenburg report alleged that SEBI chairperson Madhabi Puri Buch and her husband had investments in offshore entities linked to the Adani Group’s fund structure managed by India Infoline. These investments reportedly occurred in 2015, prior to Buch’s appointment as a full-time member of SEBI in 2017 and her elevation to chairperson in 2022.
Read also: AMFI backs SEBI chief, says Hindenburg report ‘attempts to create trust deficit in the market’
During these investigations, SEBI issued “more than 100 subpoenas, around 1,100 letters and emails” and sought assistance from national and international regulators. More than 300 documents comprising around 12,000 pages were reviewed.
SEBI stressed that its enforcement procedures follow a quasi-judicial process, which includes issuance of show cause notices and conduct of hearings, culminating in a publicly available intervention order.
The Hindenburg report also questioned SEBI’s issuance of a show-cause notice to Hindenburg on June 27, 2024. SEBI responded that the notice, alleging violations of securities law, was issued “following due process of law.” The notice is available on Hindenburg’s website and proceedings are underway, in accordance with the prescribed legal procedures.
Read also: Adani Group calls new Hindenburg report a ‘red herring’
The report also claimed that the changes in the SEBI (REIT) Regulations, 2014 had been made to benefit a large multinational financial conglomerate. SEBI countered this by explaining that any regulation or amendment is preceded by a robust consultation process involving various stakeholders, including the public. The SEBI Board deliberates on these proposals before approval and the results are published on the SEBI website to ensure transparency.
In addition, SEBI addressed concerns about potential conflicts of interest involving its chairperson, Madhabi Puri Buch. The regulator noted that Buch has consistently made required disclosures and has refrained from involvement in matters involving potential conflicts.
SEBI reiterated its commitment to maintaining a regulatory framework that “not only aligns with global best practices but also ensures investor protection” and “ensures the integrity of India’s capital markets and their orderly growth and development.”
Read also: Hindenburg-Adani case live updates
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