In a recent development, Hindenburg Research, a US-based short-seller, has launched fresh accusations against Madhabi Buch, the chairperson of market regulator Securities and Exchange Board of India (Sebi). Citing whistleblower documents, Hindenburg alleges that Buch and her husband held stakes in offshore funds used in the Adani money siphoning scandal.

According to Hindenburg's blog post, it has been 18 months since their initial report on Adani, and they claim that Sebi has shown a surprising lack of interest in investigating Adani's alleged undisclosed web of Mauritius and offshore shell entities. Hindenburg accuses Buch and her husband of having stakes in obscure offshore funds that were allegedly used in the scheme.

The offshore Bermuda and Mauritius funds, which were supposedly controlled by Vinod Adani, brother of Gautam Adani, are believed to have been employed to round-trip funds and artificially inflate stock prices. Hindenburg highlights a declaration of funds, signed by a principal at IIFL, indicating that the source of the investment was classified as "salary" and estimated the couple's net worth at around $10 million.

The research firm further alleges that despite the availability of numerous mainstream onshore Indian mutual fund products, Buch and her husband had stakes in a multi-layered offshore fund structure with minimal assets, traversing high-risk jurisdictions. The company overseeing these funds reportedly has ties to the Wirecard scandal and is run by an Adani director, with Vinod Adani significantly involved in the alleged cash siphoning scandal.

Hindenburg also references a Supreme Court order where it was recorded that Sebi had failed to uncover the identities of Adani's offshore shareholders. In a scathing remark, Hindenburg suggests that Buch could have started the investigation by looking in the mirror, insinuating that Sebi might be reluctant to follow a trail that could implicate its own chairperson.

No immediate comments have been received from Sebi regarding these allegations.

This latest round of accusations by Hindenburg follows their previous report in January last year, where they accused Adani Group of engaging in a vast corporate fraud through the use of tax havens to manipulate stock prices while accumulating substantial debt.

After the release of the Hindenburg report, the Supreme Court instructed Sebi to conduct a thorough investigation and established an expert panel to examine any regulatory lapses. However, the panel did not issue any adverse report on Adani, and the apex court stated that no additional probe was required apart from the ongoing investigation by Sebi.

Sebi had previously informed a panel appointed by the Supreme Court that they were investigating 13 opaque offshore entities holding significant stakes in five publicly traded stocks of the Adani conglomerate. It remains unclear whether the investigations into these entities have been completed.

According to Hindenburg, Buch and her husband had undisclosed investments in offshore funds located in Bermuda and Mauritius, similar to those allegedly exploited by Vinod Adani. These investments reportedly predate Buch's appointment as a whole-time member of Sebi in 2017 and her subsequent elevation to chairperson in March 2022.

Hindenburg claims that the chairperson's husband corresponded with a Mauritius fund administrator in 2017 requesting to operate accounts pertaining to their investments. The research firm also reveals that the fund's structure, named "GDOF Cell 90 (IPEplus Fund 1)," was mentioned in an account statement addressed to Madhabi Buch.

The allegations made by Hindenburg raise significant concerns about potential conflicts of interest and demand further investigation into the involvement of top regulatory officials in financial matters surrounding the Adani group.

Note: This article is based on the information provided by Hindenburg Research and the allegations made against Madhabi Buch and her husband. It is important to note that the claims are yet to be officially addressed and validated by relevant authorities.