US short-seller Hindenburg Research launched a fresh broadside against market regulator Sebi chairperson Madhabi Buch, alleging she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.

In a blogpost, Hindenburg said 18 months since its damning report on Adani, "SEBI has shown a surprising lack of interest in Adani's alleged undisclosed web of Mauritius and offshore shell entities." Citing "whistleblower documents", it said, "Madhabi Buch, the current chairperson Of SEBI, and her husband had stakes in both obscure offshore funds used in the Adani money siphoning scandal." Obscure offshore Bermuda and Mauritius funds, allegedly controlled by Vinod Adani -- elder brother of group chairman Gautam Adani -- are alleged to have been used to round-trip funds and inflate stock price.

Hindenburg said, "A declaration of funds, signed by a principal at IIFL states that the source of the investment is 'salary' and the couple's net worth is estimated at USD 10 million".

"In brief, despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry she now is responsible for regulating, documents show SEBI Chairperson Madhabi Buch and her husband had stakes in a multi-layered offshore fund structure with miniscule assets, traversing known high-risk jurisdictions, overseen by a company with reported ties to the Wirecard scandal, in the same entity run by an Adani director and significantly used by Vinod Adani in the alleged Adani cash siphoning scandal," it alleged.

It went on to cite the Supreme Court order where it was recorded that Sebi had "drawn a blank" in its investigations into who funded Adani's offshore shareholders.

"If SEBI really wanted to find the offshore fund holders, perhaps the SEBI chairperson could have started by looking in the mirror," it said. "We find it unsurprising that SEBI was reluctant to follow a trail that may have led to its own chairperson." No immediate comments were available from Sebi.

In January last year, Hindenburg Research, which in the past has shorted, or bet against, companies like electric truck maker Nikola Corp and Twitter (now X), accused Adani Group of pulling "the largest con in corporate history" by using a web of companies in tax havens to inflate its revenue and manipulate stock prices, even as debt piled up.

Though the conglomerate vehemently denied all allegations, the damning report sent the group's shares into a free fall, wiping out over USD 150 billion in market value of the 10 listed entities at their lowest point.

Most of the 10 listed companies have since recouped the losses.

After the Hindenburg report, the Supreme Court asked market regulator Sebi to complete its investigation and set up a separate expert panel to look into regulatory lapses. The panel did not give any adverse report on Adani and the apex court too stated that no other probe other than the one being done by Sebi was required.

Sebi (Securities and Exchange Board of India), which had been investigating the Adani group even before Hindenburg report, last year had told a Supreme Court-appointed panel that it was investigating 13 opaque offshore entities that held between 14 per cent and 20 per cent across five publicly traded stocks of the conglomerate. It hasn't stated if the two incomplete probes have since been completed.

"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," Hindenburg said.

It said on March 22nd, 2017, just weeks ahead of her wife being appointed SEBI chairperson, Dhaval Buch wrote to Mauritius fund administrator Trident Trust, according to documents we received from a whistleblower. The email was regarding his and his wife's investment in the Global Dynamic Opportunities Fund (GDOF).

"In the letter, Dhaval Buch requested to "be the sole person authorised to operate the Accounts", seemingly moving the assets out of his wife's name ahead of the politically sensitive appointment," it alleged.

"In a later account statement dated February 26th, 2018, addressed to Madhabi Buch's private email, the full details of the structure are revealed: "GDOF Cell 90 (IPEplus Fund 1)".

"Again, this is the exact same Mauritius-registered "cell" of the fund, found several layers deep in a convoluted structure, reportedly used by Vinod Adani," it alleged.

According to Hindenburg, Madhabi Buch and her husband had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani. These investments reportedly date back to 2015, well before Madhabi Buch's appointment as a whole-time member of SEBI in 2017 and her elevation to SEBI chairperson in March 2022.

Buch and her husband may have first opened their account with IPE Plus Fund 1 on June 5, 2015 in Singapore. IPE fund is a small offshore Mauritius fund set up by an Adani director through India Infoline (IIFL), a wealth management firm with ties to the Wirecard embezzlement scandal.

"Vinod Adani, brother of Gautam Adani, used this structure to invest in Indian markets with funds allegedly siphoned from over-invoicing of power equipment to Adani Group," claimed Hindenburg.