Hindenburg news: Congress demands Centre to ‘eliminate all conflicts…’; TMC asks ‘will CBI, ED file cases?’

Hours after US short-seller Hindenburg Research levelled allegations against Sebi chairperson Madhabi Buch, the Congress on Saturday asked the Central government to immediately eliminate all conflicts of interest in the regulator’s investigation of the Adani Group.

Congress general secretary Jairam Ramesh, in an official statement, said the Sebi’s “strange reluctance” to investigate the “Adani mega scam” has been long noted, not least by the Supreme Court’s Expert Committee.

“Under public pressure, after the Adani horse had bolted, SEBI’s board reintroduced stricter reporting rules on 28 June 2023. It told the Supreme Court’s Expert Committee on 25 August 2023 that it was investigating 13 suspicious transactions. Yet the investigations never bore fruit,” the Congress leader added.

He stated that Hindenburg Research’s revelations on Saturday indicate that Buch and her husband invested in the same offshore funds based in Bermuda and Mauritius, where “Vinod Adani and his close associates, Chang Chung-Ling and Nasser Ali Shahban Ahli, had also invested money obtained from the over-invoicing of power equipment.”

“The government must act immediately to eliminate all conflicts of interest in the SEBI investigation of Adani. The fact is that the seeming complicity of the highest officials of the land can only be resolved by setting up a JPC (joint parliamentary committee) to investigate the full scope of the Adani mega scam,” he said.

Similarly, Trinamool Congress leader Mahua Moitra also said, “crony capitalism is at its finest”. In a post on X (formerly Twitter), Moitra wrote, “In true Adani style – even SEBI Chairman is investor in his group.”

“Crony Capitalism at its finest. @CBiHeadquarters&@Dir_ED – will you be filing POCA and PMLA cases or not?” she asked.

The latest report highlights an offshore Mauritius fund called IPE Plus Fund, reportedly established by Vinod Adani through India Infoline. It also references the Bermuda-based Global Dynamic Opportunities Fund, which invested in IPE Plus Fund 1. Vinod Adani, a Dubai-based businessman and the elder brother of Gautam Adani, is still connected to the Adani Group.

“We had previously noted Adani’s total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through his relationship with the SEBI Chairperson. What we hadn’t realized: the current SEBI Chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani,” the report said.

Despite the Adani Group’s strong denial of these accusations, the report caused a sharp decline in the group’s stock prices, erasing over USD 150 billion in market value across its 10 listed companies at their lowest point. However, most of these companies have since recovered their losses.

Following the Hindenburg report, the Supreme Court of India directed the market regulator SEBI to investigate and formed an expert panel to examine potential regulatory lapses. The panel did not issue any negative findings against Adani, and the Supreme Court concluded that no additional investigations were necessary beyond SEBI’s ongoing inquiry.

SEBI informed the Supreme Court-appointed panel that it was investigating 13 opaque offshore entities holding between 14% and 20% in five publicly traded stocks of the conglomerate. It remains unclear if these two ongoing investigations have since been completed.

(With inputs from agencies)

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First Published:

11 Aug 2024, 08:31 AM IST

HomeNewsIndia‘Who will guard the guards?’ jibes Congress at Hindenburg’s explosive report on SEBI; TMC asks ‘will ED file cases?’