Congress attacks govt over Hindenburg allegations, says JPC probe must

The Congress on Sunday, 11 August, attacked the Narendra Modi government over the Hindenburg Research's allegations against SEBI chairperson Madhabi Buch, with Rahul Gandhi saying the integrity of the market regulator has been "gravely compromised" and demanded a joint parliamentary committee (JPC) probe into the entire matter.

Rahul Gandhi also attacked Prime Minister Narendra Modi over the issue, saying that it is now “abundantly clear why PM Modi is so afraid" of a JPC probe.

The Congress said the Supreme Court should take suo motu cognisance of the "entire scam" and investigate it under its aegis because here the investigating agency SEBI itself is accused of being involved in it.

It also asserted that in the wake of such "serious allegations", Buch cannot remain in her position at all.

Congress president Mallikarjun Kharge said the Securities and Exchange Board of India (SEBI) previously cleared Adani before the Supreme Court following the January 2023 Hindenburg Report revelations.

However, new allegations have surfaced regarding a "quid-pro-quo" involving the SEBI chief, he said.

"The small & medium investors belonging to the Middle Class who invest their hard-earned money in the stock market need to be protected, as they believe in the SEBI. A Joint Parliamentary Committee inquiry is imperative to investigate this massive scandal," he said.

"Until then, concerns persist that PM Modi will continue to shield his ally, compromising India's Constitutional institutions, painstakingly built over seven decades," Kharge said in a post on X.

Congress spokesperson Supriya Shrinate, at a presser, asked what do PM Modi and the government have to say about their "own market regulator" being surrounded by such allegations.

In a post on X, Rahul Gandhi said, "The integrity of SEBI, the securities regulator entrusted with safeguarding the wealth of small retail investors, has been gravely compromised by the allegations against its chairperson." "Honest investors across the country have pressing questions for the government: Why hasn't SEBI chairperson Madhabi Puri Buch resigned yet? If investors lose their hard-earned money, who will be held accountable?PM Modi, the SEBI chairperson, or Gautam Adani?" the former Congress chief said.

In light of the new and "very serious" allegations that have surfaced, will the Supreme Court look into this matter suo motu once again, Gandhi asked.

"It is now abundantly clear why Prime Minister (Narendra) Modi is so afraid of a JPC (joint parliamentary committee) probe and what it might reveal," he said.

US short-seller Hindenburg Research Saturday launched a broadside against market regulator SEBI chairperson Madhabi Buch, alleging she and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal.

SEBI chairman Buch and her husband have denied the allegations as baseless and asserted their finances are an open book.

The Adani Group termed the latest allegations malicious and based on manipulation of select public information. The company said it has no commercial relationship with SEBI chairperson or her husband.

In a statement issued late Saturday night and reposted on X on Sunday, Congress general secretary Jairam Ramesh said the SEBI's "strange reluctance to investigate the Adani mega scam" has been long noted, not least by the apex court's Expert Committee.

The Committee, he said, had noted that SEBI in 2018 diluted and in 2019, entirely deleted the reporting requirements relating to the ultimate beneficial (i.e. actual) ownership of foreign funds.

"This had tied its hands to the extent that 'the securities market regulator suspects wrongdoing, but also finds compliance with various stipulations in attendant regulations... It is this dichotomy that has led to SEBI drawing a blank worldwide'," Ramesh said quoting the Expert Committee.

The Congress leader said the revelation raised fresh questions about Gautam Adani's two 2022 meetings in quick succession with Buch, shortly after she became the stock market regulator's chairperson.

"The government must act immediately to eliminate all conflicts of interest in the SEBI investigation of Adani," the former Union minister said in his statement.

Hitting back at the BJP for claiming that the Congress' attack over the allegations was almost simultaneous to the Hindenburg statements, Ramesh said, "Hindenburg broke at 9:57 PM on August 10th. Our statement was issued at 11:49 PM on the same day. Our opponents can’t bear to see our rapid response time."

"Fear not - when the tempo-wallah’s next scam inevitably surfaces, we’ll be back within the hour," he said.

Addressing a press conference, Congress spokesperson Shrinate posed questions to Buch, asking that when she was a whole-time director of SEBI, did she ever hold shares/stakes in Agora Partners in Singapore or Agora Partners in India.

Did she disclose this shareholding and the income and revenue received, Shrinate asked.

"Which entities gave business to Agora? Did you transfer your stake in Agora to your husband in 2022? Which entities continue to give business to Agora Singapore or Agora India? Did you inform SEBI that your husband has joined Blackstone, the biggest player in REIT investment?" Shrinate said.

"Before telling the Supreme Court that SEBI did not find anything, did you inform the court-appointed committee or the Supreme Court that you or your husband had been investors in some of the funds you were tasked to investigate?" Shrinate said.

"Did you recuse yourself from the investigation, and if you didn't, why didn't you do so?" she said.

Shrinate asked whether in the wake of the allegations against her, SEBI chief Buch can continue in her position or should she be removed with immediate effect.

Posing questions to the government, Shrinate asked whether this alleged collusion between Adani and SEBI chief was possible without the protection of PM Modi.

What do PM Modi and the government have to say about their "own market regulator" being surrounded by such allegations, she asked.