Hindenburg-Adani Case: SEBI chief Madhabi Puri Buch, husband’s 15-point rebuttal to allegations, ‘attempting to attack’

SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, have released a thorough response to the recent accusations made by Hindenburg Research. These claims, published on August 10, 2024, imply that Madhabi Puri Buch held a stake in offshore entities linked to the Adani group, raising concerns about possible 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 adherence.

They also emphasized that the contested investment occurred before Madhabi's tenure at SEBI and was overseen by a trusted friend.

The Buch ended their statement by denouncing the Hindenburg report as a deliberate attempt to discredit SEBI and its Chairperson. They accused Hindenburg of engaging in character assassination and ignoring the show cause notice they had previously received.

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

Here's what SEBI chief Madhabi Puri Buch and her husband Dhaval Buch said in a joint statement -

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

2. Dhaval Buch is an alumnus of IIT Delhi and has had a corporate career of 35 years in Hindustan Unilever Limited in India and then in Unilever globally as part of its senior management team. During this long period, Madhabi and Dhaval have accrued their savings through their salaries, bonuses and stock options. Insinuations about their net worth and investments referencing Madhabi’s current government salary is malicious and motivated.

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

4. From 2011 to March 2017, Madhabi lived and worked from Singapore, initially as an employee of a Private Equity firm and subsequently as a consultant.

5. The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member.

6. The decision to invest in this fund was because the Chief Investment Officer, Mr Anil Ahuja, is Dhaval's childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, J.P. Morgan and 3i Group plc, had many decades of a strong investing career. The fact that these were the drivers of the investment decision is borne out by the fact that when, in 2018, Mr. Ahuja, left his position as CIO of the fund, we redeemed the investment in that fund.

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

8. Dhaval’s appointment, in 2019, as Senior Advisor to Blackstone Private Equity was on account of his deep expertise in Supply Chain management. Thus his appointment pre-dates Madhabi’s appointment as SEBI Chairperson. This appointment has been in the public domain ever since. At no time has Dhaval been associated with the Real Estate side of Blackstone.

9. On his appointment, the Blackstone Group was immediately added to Madhabi’s recusal list maintained with SEBI.

10. Over the last two years, SEBI has issued more than 300 circulars (including “Ease of Doing Business” initiatives in line with the developmental mandate of SEBI) across the entire market eco-system. All regulations of SEBI are approved by its Board (and not by its Chairperson) after extensive public consultation. Insinuations that a handful of these matters related to the REIT industry were favours to any specific party are malicious and motivated.

11. The two consulting companies set up by Madhabi during her stay in Singapore, one in India and one in Singapore, became immediately dormant on her appointment with SEBI. These companies (and her shareholding in them) were explicitly part of her disclosures to SEBI.

12. After Dhaval retired from Unilever in 2019, he started his own consultancy practice through these companies. Dhaval’s deep expertise in Supply Chain allowed him to work with prominent clients in the Indian industry. Thus, linking accruals in these companies to Madhabi’s current government salary is malicious.

13. When the shareholding of the Singapore entity moved to Dhaval, this was once again disclosed, not just to SEBI, but also to the Singapore authorities and the Indian tax authorities.

14. SEBI has strong institutional mechanisms of disclosure and recusal norms as per the code of conduct applicable to its officers. Accordingly, all disclosures and recusals have been diligently followed, including disclosures of all securities held or subsequently transferred.

15. Hindenburg has been served a show cause notice for a variety of violations in India. It is unfortunate that instead of replying to the Show Cause Notice, they have chosen to attack the credibility of the SEBI and attempt character assassination of the SEBI Chairperson.