Hindenburg-Adani case: SEBI chief Madhabi Puri Buch and her husband’s 15-point rebuttal to allegations, ‘trying to attack’

SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch have released a comprehensive response to the recent allegations made by Hindenburg Research. These claims, published on August 10, 2024, imply that Madhabi Puri Book had stakes in offshore entities linked to the Adani group, raising concerns about potential conflicts of interest and regulatory misconduct.

In their statement, Madhabi Puri Buch and Dhaval Buch firmly addressed the allegations, providing a detailed rebuttal and underscoring their dedication to transparency and regulatory compliance.

They also highlighted that the impugned investment occurred before Madhabi’s tenure at SEBI and was supervised by a trusted friend.

The Buch concluded its statement by denouncing the Hindenburg report as a deliberate attempt to discredit SEBI and its president. They accused Hindenburg of defamation and of ignoring the notice of cause they had previously received.

The statement comes at a time of increasing scrutiny of SEBI’s regulatory practices and an ongoing political debate over the allegations contained in the Hindenburg report.

Here’s what SEBI chief Madhabi Puri Buch and her husband Dhaval Buch had to say in a joint statement:

1. Madhabi is an IIM Ahmedabad alumnus and has had a corporate career spanning over two decades in banking and financial services, predominantly with the ICICI Group.

2. Dhaval Buch is an IIT Delhi alumnus and has had a 35-year corporate career with Hindustan Unilever Limited in India and then with Unilever globally as part of its senior management team. Over this long period, Madhabi and Dhaval have accumulated their savings through their salaries, bonuses and stock options. The insinuations about their net worth and investments that make reference to Madhabi’s current government salary are malicious and motivated.

3. From 2010 to 2019, Dhaval lived and worked in London and Singapore, both at Unilever.

4. From 2011 to March 2017, Madhabi lived and worked in Singapore, initially as an employee of a private equity firm and later as a consultant.

5. The investment in the fund referred to in the Hindenburg report was made in 2015, when both were private citizens living in Singapore and almost two years before Madhabi joined SEBI, even as a full-time member.

6. As confirmed by Mr Ahuja, at no point of time did the fund invest in any bond, stock or derivative of any Adani group company.

7. As confirmed by Mr Ahuja, at no point of time did the fund invest in any bond, stock or derivative of any Adani group company.

8. Dhaval’s appointment in 2019 as a Senior Advisor to Blackstone Private Equity was due to his deep expertise in supply chain management. His appointment therefore predates Madhabi’s appointment as a Senior Advisor to Blackstone Private Equity. Chairman of SEBIThis appointment has since become public knowledge. At no time has Dhaval been associated with Blackstone’s real estate business.

9. Following his appointment, the Blackstone Group was immediately added to the SEBI list of Madhabi’s disqualifications.

10. In the last two years, SEBI has issued over 300 circulars (including “ease of doing business” initiatives in line with SEBI’s development mandate) across the market ecosystem. All SEBI regulations are approved by its Board of Directors (and not its Chairman) after extensive public consultation. Insinuations that a handful of these issues relating to the REIT industry were favours to some specific party are malicious and motivated.

11. The two consultancy firms that Madhabi had set up during his time in Singapore, one in India and one in Singapore, ceased to be active immediately after his appointment to SEBI. These firms (and his shareholding in them) were explicitly listed in the declarations he made to SEBI.

12. After Dhaval retired from Unilever in 2019, he started his own consulting practice through these companies. Dhaval’s deep supply chain expertise enabled him to work with prominent clients in the Indian industry. Therefore, linking accruals in these companies to Madhabi’s current government salary is mischievous.

13. When the Singapore entity’s stake was moved to Dhaval, this was revealed once again, not only to SEBIbut also to the Singapore authorities and the Indian tax authorities.

14. SEBI has in place robust institutional mechanisms for disclosure and disqualification norms as per the code of conduct applicable to its officers. Accordingly, all disclosures and disqualifications, including disclosures of all securities held or subsequently transferred, have been diligently followed.

15. Hindenburg has been served with a show-cause notice for various violations in India. It is unfortunate that instead of responding to the notice, they have chosen to attack the credibility of SEBI and attempt to defame its Chairman.