Hindenburg Research's second report on the Adani scam is in some ways even more explosive than the first report that had rocked the world eighteen months ago. The first report had exposed the monumental corporate fraud perpetrated by the Adani group and pushed Gautam Adani down the global ladder of wealth. Questions were raised across India, including in the Indian parliament, about the Modi-Adani nexus. In response, the regime desperately attempted to suppress every inconvenient question going to the extent of disqualifying, expelling and arresting those parliamentarians who were most vocal in demanding answers. Modi said not a word about Adani until he inadvertently accused Ambani and Adani of supplying black money to the Congress in one of his desperate election speeches.
In the legal arena, the demand for an investigation into the alleged corporate fraud of the Adani group was referred last year by the Supreme Court to an expert panel and the market regulatory institution the Securities and Exchange Board of India (SEBI). According to an affidavit filed by SEBI in the Supreme Court on 25 August 2023, two of the 24 investigations were still awaiting conclusion. And now the second Hindenburg report raises serious questions about the SEBI chairperson Madhabi Puri Buch and her husband Dhaval Buch, which in turn makes the credibility of the whole investigation highly suspect. According to the whistleblower documents cited in the latest Hindenburg report, Madhabi and Dhaval Buch themselves had stakes in Bermuda and Mauritius-based offshore entities managed by the Adani group in its money-siphoning scam.
Madhabi and Dhaval Buch have issued a statement since the release of the Hindenburg report on 10 August. Their rejoinder confirms the basic facts outlined in the Hindenburg report, and indeed raises more questions than it answers. It also confirms the existence of the Singaporean and Indian entities - Agora Partners Singapore and Agora Advisory Limited (India) - set up by Madhabi Buch, and Dhaval Buch's involvement with the global private equity firm Blackstone which has benefited from certain recent SEBI regulations. It is not enough for the Buch family and SEBI to dismiss the allegations made in the Hindenburg report as being 'malicious and motivated' when the basic facts all stand substantiated.
The charges need to be probed thoroughly and the first step clearly has to be the resignation of Madhabi Puri Buch from the post of Chairperson of SEBI. In fact, the affidavit filed by the SEBI in Supreme Court should be revisited and the SC should reopen the twenty-two cases investigated by the SEBI. The SC had held the SEBI as the ultimate authority in the whole probe, yet the probe has remained incomplete even beyond the extended time frame granted by the SC. The first Hindenburg report on the Adani group had led to a major crash in Adani shares clearly adversely affecting many retail investors. The second report, though not raising any fresh charges against the Adani group, has also led to a reported loss of Rs 53,000 crore in the combined market value of ten combined Adani stocks.
More than the Adani group, the report clearly affects the credibility of SEBI and the investor trust in the Indian share market. And the SEBI-Adani equation may well have been growing over a longer period. We have not forgotten that the previous chairman of SEBI, Mr UK Sinha is now a non-executive chairperson of Adani-owned NDTV. While Madhabi and Dhaval Buch tell us that they have made all essential disclosures before SEBI, the very fact that the chairperson has a history of investing in Adani-linked offshore funds - while her husband in his capacity as a senior advisor of a multinational equity firm continues to deal with 'prominent clients in the Indian industry' - certainly does not inspire any confidence in the functioning of SEBI.
From UPSC to Election Commission to SEBI, every institution has been compromised and captured in the Modi era while every investigative agency has been weaponised against the opposition. When the result becomes obvious, and the world starts commenting about the sordid state of affairs - be it about the fragile state of India's democracy, growing hunger, declining press freedom or fraudulent corporate governance - the regime seeks to suppress it by crying conspiracy! But Hindenburg certainly cannot be blamed for India's growing economic mess that the government's own economic survey had to admit. If SEBI has been complicit in the shocking growth of crony capitalism in the Modi era, it is in the interest of the Indian economy and the Indian people to get to the bottom of this scam and hold those responsible to account.
