US short-seller Hindenburg Research alleged that it suspects SEBI's unwillingness to act against Adani group may be because of its head Madhabi Puri Buch had stakes in offshore funds linked to the conglomerate - an allegation slammed by the SEBI head as "baseless" while Adani group said it never had any commercial relations with Buch.

Hindenburg alleged that Buch and her husband had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani - the elder brother of group chairman Gautam Adani - to round-trip funds and inflate stock prices.

SEBI in October 2020 began a probe into the shareholding structure of Adani group companies after red flags were raised over high concentration of foreign holdings in the conglomerate's listed companies. An investigation was launched to determine if the foreign investors are genuine public shareholders or acting as fronts for the promoters.

SEBI last year had told a Supreme Court-appointed panel that it was investigating 13 opaque offshore entities that held between 14-20 per cent across five publicly traded stocks of the conglomerate. It hasn't stated if the two probes have since been completed, something which Hindenburg used to attack the market regulator.

Madhabi Puri Buch and her husband Dhaval Buch in a joint statement strongly denied the "baseless allegations and insinuations made in the report". The same, they said, "are devoid of any truth".

"Our life and finances are an open book," they said. "It is unfortunate that Hindenburg Research against whom SEBI has taken an enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same." Buchs further said they have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them.

While the statement did not talk on the questions Hindenburg raised over SEBI probe, the duo promised to come out with a detailed response.

Separately, Adani group in a regulatory filing called the allegations by Hindenburg as "malicious, mischievous and manipulative selections of publicly available information to arrive at predetermined conclusions for personal profiteering with wanton disregard for facts and the law." "The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing," it said. "We remain steadfastly committed to transparency and compliance with all legal and regulatory requirements".

Rejecting the allegations, it said they were nothing but a "recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Supreme Court in March 2023." "It is reiterated that our overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents," Adani group said adding Anil Ahuja was a nominee director of 3i investment fund in Adani Power (2007-2008) and, later, a director of Adani Enterprises until 2017.

"For a discredited short-seller under the scanner for several violations of Indian securities laws, Hindenburg's allegations are no more than red herrings thrown by a desperate entity with total contempt for Indian laws," it added.

Hindenburg on Saturday stated that the SEBI chairperson and her husband invested in offshore entities that were allegedly part of a fund structure managed by India Infoline and in which Vinod Adani also had investments.

These investments reportedly date back to 2015, well before her appointment as a whole-time member of SEBI in 2017 and the subsequent elevation as chairperson in March 2022.

It said Bermuda-based Global Opportunities Fund, which allegedly was used by entities connected to Adani Group to trade in shares of group companies, had sub-funds. Buch and her husband were investors in one of these sub-funds in 2015.

Citing "whistleblower documents", Hindenburg 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." SEBI, it claimed, has "shown a surprising lack of interest in Adani's alleged undisclosed web of Mauritius and offshore shell entities." 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 Vinod 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.

Latching on to the Hindenburg allegations, Congress said the revelations only reinforced its demand for setting up a "joint parliamentary committee to investigate the full scope of the Adani mega scam" while the Trinamool Congress said the SEBI chairperson must resign.

"This raises fresh questions about Gautam Adani's two 2022 meetings in quick succession with Ms Buch shortly after she became SEBI chairperson. Recall that SEBI was supposedly investigating Adani transactions at the time," Congress leader Jairam Ramesh said.

In January last year, Hindenburg Research, which in the past has shorted - or bet against - companies like electric truck maker Nikola Corp and Twitter, 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 one being done by SEBI was required.

On June 26 this year, SEBI in a show cause notice charged Hindenburg of "deliberately sensationalising and distorting certain facts" as well as working with a New York hedge fund to make its bet.

Hindenburg had responded to that saying it made just USD 4.1 million from its declared positions on Adani stocks and criticised the regulator for not focusing its investigation into the January 2023 report "providing evidence" of the conglomerate creating "a vast network of offshore shell entities" and moving billions of dollars "surreptitiously" into and out of Adani public and private entities.

The group led by billionaire Gautam Adani, who was the world's third-richest man before Hindenburg, in an epic comeback strategy raised USD 15 billion in equity and debt, sold some assets, repaid loans that were raised pledging shares, reined in expenses, repaid some debt and refocused energies on core business.

Adani is now ranked 12th richest in the world, one notch and USD 6 billion shy of rival billionaire Mukesh Ambani. The group has also made some acquisitions, buying cement company Sanghi Industries and the news agency IANS.

Adani has insisted the Hindenburg report has not changed operations at his companies, which include ports, airports, renewable parks generating electricity from sunlight and wind energy, gas distribution, cement processors, data centres and even apple farms.

360 One Wam Ltd, formerly known as IIFL Wealth Management Ltd, separately said IPE-Plus Fund 1, a fully compliant and regulated fund, was launched in October 2013 and operated until October 2019.

"Throughout the fund's tenure, IPE-Plus Fund 1 made zero investments in any shares of the Adani Group either directly or indirectly through any fund," it said.

"At its peak, the fund's Assets Under Management (AUM) reached approximately USD 48 million, with over 90 per cent of the fund consistently invested in bonds." The fund, it said, was managed as a discretionary fund by the Investment Manager.

"No investor had any involvement in the fund's operations or investment decisions. Mrs. Madhabi Buch & Mr. Dhaval Buch's holdings in the fund were less than 1.5 per cent of the total inflow into the fund." Hindenburg on Saturday alleged that just weeks before Buch's appointment to SEBI, her husband requested the transfer of their investments into his sole control, potentially to avoid any scrutiny related to her new regulatory role.

The couple's investments were reportedly funnelled through a complex, multi-layered offshore structure, raising questions about their legitimacy and purpose.

On March 22, 2017, just weeks ahead of Buch's appointment as SEBI Wholetime Member, her husband, Dhaval Buch, wrote to Mauritius fund administrator Trident Trust. That communication was regarding his and his wife's investment in the Global Dynamic Opportunities Fund (GDOF), the US firm alleged.

"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," Hindenburg alleged.

Dhaval Buch is currently a senior advisor at Blackstone and at Alvarez & Marsal. He also serves as a non-executive director on the Board of Gildan.

"In a later account statement dated February 26, 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," Hindenburg alleged.

From April 2017 to March 2022, while Buch was a Wholetime member and Chairperson at SEBI, she had a 100 per cent interest in an offshore Singaporean consulting firm, called Agora Partners, it alleged adding On March 16, 2022, two weeks after her appointment as SEBI Chairperson, she quietly transferred the shares to her husband.

To date, SEBI has taken no action against these funds, it claimed.

"If SEBI really wanted to find the offshore fund holders, perhaps the SEBI Chairperson could have started by looking in the mirror," Hindenburg said.

In response to requests from the Supreme Court to investigate the Adani matter, SEBI is said to have hit a wall unveiling the holders of the offshore funds. The Supreme Court said that while SEBI seemingly agreed with its concerns over who funded Adani's offshore shareholders, "it is evident that SEBI has drawn a blank in this investigation", the firm alleged.

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