Hindenburg questions SEBI chief's silence on fresh charges

In a regulatory filing, Mahindra & Mahindra Ltd refuted allegations of conflict of interest on payments made to Dhaval Buch, describing the charges as 'false and misleading in nature'.

US-based short seller Hindenburg Research has questioned SEBI chief Madhabi Puri Buch's "complete silence" on fresh allegations of impropriety, conflict of interest and accepting payments from companies while serving as a member of the market regulator.

Hindenburg, which had in January 2023 accused Adani Group of using tax havens to sidestep local market regulations, had last month alleged that Securities and Exchange Board of India (SEBI) chairperson Buch's previous investments and dealings may be behind the slow probe against the conglomerate.

While Buch and the Adani Group had denied last month's allegations, the opposition Congress party has in recent days made a series of allegations against Buch including holding 99 per cent shares in a company "actively providing advisory/consultancy services till date" and her husband Dhaval Buch earning income from companies that were being adjudicated by her.

Buch, who has so far not responded to the allegations, on Thursday cancelled her appearance at the NaBFID Infrastructure Conclave in Mumbai. She was listed as a keynote speaker at the conclave.

"New allegations have emerged that the private consulting entity, 99 per cent owned by SEBI Chair Madhabi Buch, accepted payments from multiple listed companies regulated by SEBI during her time as SEBI Whole-Time Member. The companies include: Mahindra & Mahindra, ICICI Bank, Dr. Reddy's and Pidilite," Hindenburg said in a post on X, formerly Twitter.

These allegations, it said, "apply to Buch's Indian consulting entity with no details thus far on Buch's Singapore-based consulting entity."

"Buch has maintained her complete silence for weeks on all of the emerging issues," it added.

Hindenburg had on August 11 alleged that Buch had previous investments in an offshore fund, also used by the Adani Group.

Buch and her husband had denied those allegations.

Since then, Congress and Zee group chairman Subhash Chandra have levelled charges against them but they have not responded so far.

Congress has alleged that Dhaval Buch earned Rs 4.78 crore from Mahindra Group at a time when the regulator was investigating it for market infractions.

Responding to the allegation, Mahindra & Mahindra has stated that the "Group hired Dhaval Buch in 2019 specifically for his expertise in supply chain and sourcing, soon after he retired as Unilever's Global Chief Procurement Officer."

It said he joined Mahindra Group almost 3 years before Madhabi Puri Buch was appointed as SEBI chairperson. "Compensation has been specifically and only for Buch's supply chain expertise and management acumen, based on his global experience at Unilever."

Prior to becoming chairperson, she was a Whole-Time Member of SEBI from April 2017.

Separately, Dr Reddy's Laboratories and Pidilite Industries also stated that they had engaged the services of Dhaval Buch when his wife held second highest office at SEBI but denied allegations of any conflict.

While Dr Reddy's said it paid Rs 6.58 lakh to Buch in exchange for his services, Pidilite said that it has never been under any SEBI enquiries or orders.

Last month, Hindenburg had alleged that the Buchs opened an account in 2015 with a wealth management firm in Singapore to invest undisclosed sum of money in a Mauritius-registered offshoot of a Bermuda-based fund. The Mauritian fund was run by an Adani director and its ultimate parent was the vehicle used by two Adani associates to round-trip funds and inflate stock prices.

Hindenburg also alleged that she held 100 per cent interest in a Singaporean consulting firm, Agora Partners from April 2017 to March 2022 while she was a Whole-Time Member in SEBI. She passed on the shares to her husband two weeks after her appointment as the SEBI chairperson.

Responding, the Buchs had called Hindenburg's latest tirade an attack on the credibility of SEBI and attempted "character assassination".