Character assassination, says Madhabi Buch; hit job, says BJP

In a late-night statement issued on Saturday, 10 August, SEBI chief Madhabi Puri Buch and her husband Dhaval Buch doubled down to deny allegations made in the new report released by Hindenburg Research.

Promising that a detailed statement would be issued later, the statement released to the media stated:

'In the context of allegations made in the Hindenburg report dated August 10, 2024 against us, we would like to state that we strongly deny the baseless allegations and insinuations made in the report. The same are devoid of any truth.'

'Our life and finances are an open book. All disclosures as required have already been furnished to SEBI over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them.'

'Further, in the interest of complete transparency, we would be issuing a detailed statement in due course. It is unfortunate that Hindenburg Research against whom SEBI has taken an Enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same.'

That detailed statement may be expected today, Sunday, 11 August, or at the latest before markets open on Monday, 12 August, in a bid to prevent a bloodbath and shore up investors’ confidence.

Meanwhile, the BJP’s IT cell chief, Amit Malviya, took to X to take a potshot at the report and at the Congress' reaction to it.

Responding to the statement issued by Jairam Ramesh on behalf of the Congress last night (August 10), which demanded an inquiry into SEBI and its chairman’s links to the Adanis, Malviya posted on X: 'Hindenberg’s hit job and Congress’s statement appeared simultaneously. It appears as if some associate of Hindenberg drafted it for the Congress, along with the report, but forgot to instruct the time of release.'

Jairam Ramesh had shared the Congress statement with a tag of 'Quis custodiet ipsos custodiet' — the Latin aphorism wondering 'who guards the guards' (custodians being literally what SEBI officials are).

The Adani Group had also denied the allegations made against it by Hindenburg Research in January 2023 and had threatened to take legal redressal. However, nobody has yet taken the US-based firm to court.

The allegations made by Hindenburg were actually corroborated and expanded by several international media outlets. It remains to be seen whether the SEBI chief decides to file for defamation and demands to be compensated for damages.

As the SEBI chief’s statement says, SEBI had served a show cause notice to Hindenburg Research in July (just last month). The latest allegations and insinuations, her statement suggests, are in retaliation.

In its report released on Saturday, Hindenburg Research had this to say about the show-cause notice:

'SEBI did not allege any factual errors in our 106-page analysis, but instead claimed the disclosure around our short position — which we disclosed repeatedly — was deficient, arguing that we should have provided even more robust disclosure.'

The report continues:

'The SEBI notice also claimed our report was “reckless” for quoting a banned broker with specific experience dealing with SEBI who detailed how the regulator was fully aware that firms like Adani used complex offshore entities to flout rules, and that the regulator participated in the schemes.'

'In our July 2024 response to the ‘show cause’ notice, we wrote that we found it odd how SEBI — a regulator specifically set up to prevent fraudulent practices — showed little interest in meaningfully pursuing the parties that ran a secret offshore shell empire engaging in billions of dollars of undisclosed related party transactions through public companies while propping up its stocks through a network of sham investment entities.'