The Union Ministry of Finance's statement on the allegations by Hindenburg Research against Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch is seen as an attempt to downplay the significance of the financial fraud involving billionaire Gautam Adani.
Economic Affairs Secretary Ajay Seth said that the government will not take further action or comment on the allegations since both SEBI and the Chairperson have already given their statements on the issue, leaving the matter completely to them, while the opposition calls for a probe into it.
The controversy erupted when Hindenburg Research, a US-based short-seller, alleged that Buch and her husband were linked to offshore funds involved in the Adani money siphoning scandal.
The research firm claimed that the couple had investments in the Global Dynamic Opportunities Fund (GDOF), which reportedly had ties to Vinod Adani, the brother of prominent businessman Gautam Adani.
In response to these allegations, SEBI has defended its Chairperson, asserting that the regulator has robust internal mechanisms to handle potential conflicts of interest. SEBI emphasized that the Chairperson has consistently adhered to disclosure requirements and has recused herself from matters where conflicts could arise.
The accusations come nearly 18 months after Hindenburg Research's previous claims about the Adani Group, which had caused significant political and financial upheaval. The initial allegations suggested serious misconduct, including stock market manipulation and accounting fraud, which the Adani Group vehemently denied. Despite the controversy, the Supreme Court dismissed calls for a CBI or court-monitored investigation.
Meanwhile, BJP MP Ravi Shankar Prasad criticized the Opposition, accusing Congress and its allies of conspiring to create economic instability in India. He claimed that the timing of the Hindenburg report, followed by market upheaval, was part of this scheme.
Prasad defended SEBI against what he described as baseless allegations from the US short-seller, asserting that SEBI had previously addressed Hindenburg's concerns and that the notice issued was ignored by the firm.
The Opposition, meanwhile, has condemned the BJP-led government over Hindenburg's claims linking SEBI Chairperson Madhabi Puri Buch to funds associated with the Adani Group.
Congress questioned Buch’s appointment to SEBI and suggested that the BJP failed to address potential conflicts of interest. Congress spokesman Pawan Khera criticized the BJP for not scrutinizing Buch’s background more thoroughly.
Both Buch and her husband have denied these claims, asserting their finances are transparent. This report follows Hindenburg's previous allegations of stock market manipulation and accounting fraud by the Adani Group, which had sparked significant political controversy 18 months ago.