India’s market regulator denies bias in Adani probe

India's market regulator chief on Sunday denied allegations by UK short-seller Hindenburg Research that past offshore investments might have compromised her ability to properly investigate claims of corporate misconduct against the Adani Group.

Last year, the Adani Group, a major Indian conglomerate with interests ranging from ports to power, saw a significant drop in its market value after Hindenburg released a report accusing the group of engaging in "brazen" corporate fraud.

Gautam Adani, the founder of the Adani Group and currently ranked as the 12th richest person in the world according to Bloomberg's billionaire index, dismissed the allegations as a "deliberate attempt" to harm the group's reputation for the benefit of short-sellers.

Hindenburg alleged that Vinod Adani, Gautam Adani’s elder brother, "manages a vast labyrinth of offshore shell entities" in tax havens such as Mauritius, Cyprus, and several Caribbean islands.

'Insinuations'

The fraud claims resulted in the Adani Group losing over £117 billion in market value and led India's top court to instruct the Securities and Exchange Board of India (SEBI) to investigate the allegations.

On Saturday, Hindenburg, citing whistleblower documents, accused SEBI chairperson Madhabi Puri Buch and her husband of holding investments in offshore funds allegedly used by Vinod Adani.

"We suspect SEBI's unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from chairperson Madhabi Buch's complicity in using the exact same funds used by Vinod Adani," Hindenburg stated.

The report suggested that the regulator might have been "reluctant to follow a trail that may have led to its own chairperson."

According to the report, the couple opened their account in one fund in 2015, and weeks before Buch's appointment to SEBI as a "whole-time member" in 2017, her husband requested to be the sole operator of the account.

Buch, who was later appointed as chairperson of SEBI in 2022, responded by saying that her and her husband's "life and finances are an open book."

"We strongly deny the baseless allegations and insinuations made in the report," she stated.

"All disclosures as required have already been furnished to SEBI over the years," she added.

"We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them."

Adani is known to be a close associate of prime minister Narendra Modi, and opposition parties and other critics have claimed that this relationship has helped Adani gain business advantages and avoid proper scrutiny.

(With inputs from AFP)