Hindenburg Vs SEBI: Supreme Court plea seeks directive to complete Adani Group probe

An application filed in the Supreme Court on Tuesday (Aug 13) stated that the latest allegations by Hindenburg Research against Securities and Exchange Board of India (SEBI) Chairperson Madhabi Buch have created an “atmosphere of doubt,” making it essential for the court to complete its investigation into the Adani Group and disclose its findings.

Petitioner, advocate Vishal Tiwari, reminded that the Supreme Court, in its judgment on January 3, had given SEBI three months to complete 24 investigations into Hindenburg’s earlier report accusing the Adani Group of share price manipulations and violations of securities law.

SEBI completed most of its investigations into the Adani Group, with only two pending due to required information from external sources. Given recent developments, the application urges the court to set a specific deadline for concluding these final probes.

The application said, “It is important in the public interest and for the sake of the Investors who lost their funds after the publication of the Hindenburg report in 2023 against Adani Group. The right to know about the investigations led by SEBI and its conclusions are essential for the benefit of investors.”

Tiwari referred to Hindenburg's claims that SEBI chief Madhabi Buch and her husband had financial ties to offshore funds allegedly involved in the Adani Group's financial misconduct.

The report cited “whistleblower documents”.

Notably, the report comes a year and a half after Hindenburg’s damaging report on the Adani Group that had far-reaching consequences, including the cancellation of the company’s flagship ₹20,000 crore (23,82,044.00 USD) follow-on public offer.

The application alleged, “Hindenburg claimed in a blog post that 18 months after its preliminary report on Adani, the Securities and Exchange Board of India (SEBI) has shown an unexpected lack of interest in investigating Adani’s alleged web of undisclosed Mauritius and offshore shell entities.”

According to Hindenburg, Tiwari said, an announcement of funds signed by a principal at IIFL stated that the source of the investment was salary, and the couple’s net worth was estimated at $10 million. Hindenburg claimed that just weeks before her appointment as SEBI chairperson in March 2017, Madhabi Buch's husband requested sole control over their offshore accounts from Mauritius fund administrator Trident Trust.

The email, allegedly obtained from a whistleblower, appeared to indicate an attempt to move the assets out of his wife’s name ahead of her politically sensitive appointment.

"The SEBI chief has dismissed the allegations as unfounded. While the court has ruled that third-party reports are inadmissible, the claims have nonetheless created public and investor uncertainty. Under these circumstances," the application said.

(With inputs from agencies)