August 11th 2024.
On Sunday, the Congress party demanded immediate action from the government to address the conflicts of interest in the investigation of the Adani Group by the Securities and Exchange Board of India (SEBI). This came after US-based short-seller Hindenburg Research made allegations against SEBI Chairperson Madhabi Buch and her husband for their involvement in offshore funds related to the Adani money siphoning scandal.
The opposition party also reiterated their call for a joint parliamentary committee (JPC) probe into the matter, stating that the "seeming complicity of the highest officials of the land" can only be resolved through a thorough investigation. In a blog post, Hindenburg Research had accused Buch and her husband of having stakes in obscure offshore funds used in the Adani scandal. They also criticized SEBI for not taking action against the Adani Group's alleged undisclosed web of Mauritius and offshore shell entities, despite their damning report 18 months ago.
However, Buch and her husband have denied these allegations, stating that their finances are transparent and open to scrutiny. Congress leader Jairam Ramesh also pointed out that SEBI's "strange reluctance" to investigate the Adani mega scam was noted by the Supreme Court's Expert Committee. The committee had observed that SEBI had diluted and later deleted reporting requirements related to the ultimate beneficial ownership of foreign funds in 2018 and 2019 respectively.
Ramesh also highlighted that SEBI had reintroduced stricter reporting rules in June 2023, under public pressure after the Adani scandal was exposed. However, the investigations into the 13 suspicious transactions reported by SEBI did not yield any results. The recent revelations by Hindenburg Research show that Buch and her husband had invested in the same offshore funds used by Vinod Adani and his associates to amass large stakes in Adani Group companies.
This raises questions about Gautam Adani's two meetings with Buch in 2022, shortly after she became SEBI's chairperson. The Congress party stated that the government must take immediate action to eliminate any conflicts of interest in SEBI's investigation of the Adani Group. They also emphasized the need for a JPC to investigate the full scope of the Adani mega scam, given the "seeming complicity of the highest officials of the land."
Congress party's media and publicity department head Pawan Khera also weighed in on the matter, stating that the Hindenburg report not only exposes the cozy relationship between Buch and the Adani group but also highlights how appointments to watchdog institutions are made in the current government. He questioned the government's due diligence process before appointing Buch as SEBI's chairperson, stating that these damning details would have been uncovered if a proper check was conducted.
Khera also pointed out that it would be naive to believe that the government was unaware of the offshore investments made by Buch and her husband. He stated that the responsibility falls on the Prime Minister of India, and only a JPC can provide all the answers. In January 2020, Hindenburg Research had accused the Adani Group of engaging in the "largest con in corporate history" by using a web of companies in tax havens to inflate revenue and manipulate stock prices.
Despite vehemently denying these allegations, the report caused a significant drop in the group's share prices, wiping out over $150 billion in market value. However, most of the 10 listed companies have since recovered their losses. The Supreme Court had ordered SEBI to complete its investigation and set up an expert panel to look into regulatory lapses in the Adani case. The panel did not find any evidence against Adani, and the apex court stated that no other probe was necessary apart from SEBI's ongoing investigation.
Last year, SEBI had informed a Supreme Court-appointed panel that they were investigating 13 opaque offshore entities that held significant stakes in five publicly traded stocks of the Adani Group. However, it is unclear if these investigations have been completed yet. Overall, the Congress party has demanded swift and transparent action from the government to address the conflicts of interest and ensure a fair investigation into the Adani mega scam.
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