HINDENBURG - ADANI SAGA !!!

Hindenburg earlier accused Adanis resorted to unethical tax practices and other things which resulted in massive downfall in share prices of Adani group companies. Later the regulatory body SEBI initiated probe in the matter and just when matter was seemingly gone off the radar, they are back. This time Hindenburg have made shocking and some serious allegations on SEBI chief Madhabi Buch and her suspicious role in handling their earlier report about Adanis. 

WHAT'S AT STAKE:

• Credibility of the regulatory body in question i.e. SEBI
• conflict of interest of SEBI Chief
• ADANI issues- since 2014, NDA govt is being targeted for favoring ADANI AMBANI. Now this event will fuel such allegations.
• India's image on global scenario might take a hit if this scandal blows out of proportion.
• Investor confidence - both local and global investor confidence needs to be restored.

TIMELINE OF EVENTS...

JANUARY 2023- 

In January 2023, Hindenburg released a report alleging improper use of tax havens and stock manipulation by the Adani group, setting off a $150 billion selloff in the conglomerate's stocks despite its denials of wrongdoing. The stocks have since recovered partially.

JULY 2024

The Securities and Exchange Board of India (Sebi) has issued showcause notices (SCNs) to American short-seller Hindenburg Research, US-based hedge fund manager Mark Kingdon, and four others, accusing them of colluding to use non-public information to build short positions against the Adani group.

New York-based Hindenburg Research has dismissed Sebi's notice as “nonsense” and claimed that it barely broke even — a total of $4.1 million in gross revenue through gains related to Adani shorts.

AUGUST 2024

Hindenburg has now targeted Sebi chief Madhabi Puri Buch and her husband Dhaval Buch in the Adani issue saying that the couple owned stakes in Mauritius and Bermuda-based offshore entities linked to Gautam Adani's brother Vinod Adani. "If Sebi really wanted to find the offshore fund holders, perhaps the Sebi chairperson could have started by looking in the mirror," Hindenburg said in its report

ANALYSIS AND VIEWS:

Hindenburg have produced records from ministry of corporate affairs which ostensibly shows that SEBI chief own 99% stake in consulting business called Agora Advisory where her husband is director. 

if this is true then it raises some serious questions on the role of SEBI chief and there is suspicion of Conflict of interest, and she should come out and clear all the negativity being spread over social media.

Moreover questions remain as 

whether she is allowed to own consulting business and retain SEBI chief position?

Has she disclosed she is running consultancy business?

Whether she has investments in Offshore entities as alleged by Hindenburg?

If yes, then what's the source of the amount invested in Offshore entities and how the transaction has taken place. The transaction details should be scrutinized.

WHAT IS EXPECTED TO BE DONE : 

• Madhabi Buch should come out clean and clear stating all the facts.
• SEBI should conduct fair and transparent investigation and more importantly its report should be made public so that future events won't take place.
• Restoring investor confidence at local and global levels.

Interesting times ahead!!! Let's see what action unfolds in the wake of this new controversy.

- SACHIN GOSWAMI.