India’s stock market has been abuzz, not just due to investor interest but primarily because of allegations against Madhabi Puri Buch, the chief of the Securities and Exchange Board of India (SEBI). The controversy erupted after Hindenburg Research, a U.S.-based activist-investor firm, hinted at “something big” before releasing a report accusing Buch of connections to offshore funds linked to the Adani Group. Both Buch and the Adani Group have denied any wrongdoing.

Hindenburg Research, known for its previous accusations against the Adani Group involving “brazen” stock manipulation and accounting fraud, now claims that Buch’s ties to these funds have influenced SEBI’s investigation into the group. The report alleges that Buch and her husband, Dhaval Buch, invested in sub-funds in 2015, which are associated with Adani’s business associates.

Buch has refuted the allegations, asserting that the investment was made before her tenure at SEBI and that there is no direct evidence linking her investment to Adani Group stocks or SEBI’s ongoing investigation. SEBI has supported Buch, stating that she has adhered to disclosure and recusal norms, and that the allegations are an attempt to undermine the credibility of the regulator.

The allegations have had a financial impact, wiping off $2.43 billion from Adani Group’s market value on Monday, although the losses were partly recovered by the end of the day. Hindenburg’s report also referenced previous investigations by the Financial Times and the Organized Crime and Corruption Reporting Project, which linked offshore funds in Bermuda and Mauritius to Adani’s associates.

The Adani Group has dismissed the allegations as a recycling of discredited claims and has emphasized the transparency of its overseas holding structure. Despite the controversy, the group maintains that there is no commercial relationship with the individuals mentioned in Hindenburg’s report.

The accusations have sparked a political debate in India, with opposition leader Rahul Gandhi criticizing SEBI’s integrity and calling for a parliamentary inquiry. The ruling Bharatiya Janata Party (BJP) has countered by accusing the opposition of creating economic instability.

As the situation develops, SEBI, Buch, and the Adani Group have yet to respond to Hindenburg’s latest remarks, and the issue is likely to remain a focal point in India’s financial and political discourse.

(Adapted from BBC.com)

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