The war of words between US short-seller Hindenburg Research and market regulator Madhabi Puri-Buch has started to escalate.

A day after Puri-Buch rubbished Hindenburg’s accusation that the Sebi chairperson had links with the Adani group which compromised the impartiality of the market regulator’s investigations into allegations of stock price manipulation and financial shenanigans against the Indian conglomerate, the US short seller said the Sebi chairperson’s statement “raises numerous new critical questions”.

Puri-Buch and her husband Dhaval Buch had come under fire because of the investment they made in a Mauritius offshore fund, IPE Fund Plus, which also served as a vehicle for the money that Vinod Adani apparently routed via two Bermuda-based entities into the Indian equity market.

Vinod, who has been a resident of Dubai and a citizen of Cyprus, is the elder brother of the Adani group’s patriarch, Gautam Adani.

The Sebi chairperson said the investment had been made in June 2015 when the couple were based in Singapore, and in their capacity as private citizens. She said it had been made long before she was appointed a whole-time member of Sebi in 2017.

Puri-Buch was elevated as Sebi chairperson in March 2022.

The Buchs had said the investment in IPE Fund Plus was made because its chief investment officer — Anil Ahuja — had been Dhaval’s childhood friend. She added that the investment was redeemed when Ahuja quit the fund.

In a series of tweets issued through its X handle, Hindenburg said Puri-Buch’s admission raised an important question: What other investments or business has the Sebi chairperson engaged in through her husband’s name while serving in an official capacity?

The Buchs had routed their money through a consultancy firm, Agora Partners, which had two arms — one based in India and the other in Singapore. Puri-Buch used to run her consultancy operations through Agora.

When she was appointed a whole-time Sebi member in 2017, she purportedly handed over control of the firms to her husband Dhaval.

Hindenburg had alleged that from April 2017 to March 2022, while Puri-Buch was a whole-time member and chairperson at Sebi, she had a 100 per cent interest in an offshore Singaporean consulting firm called Agora Partners.

However, on March 16, 2022, (two weeks after her appointment as Sebi chairperson), she “quietly transferred the shares to her husband”.

Hindenburg had also claimed that Puri-Buch had a 99 per cent stake in the Indian consulting business called Agora Advisory, where her husband is a director.

It claimed that the latest shareholding list as of March 31, 2024, showed that Agora Advisory Ltd (India) wasstill 99 per cent owned by Madhabi Buch, and not her husband.

Hindenburg then hurled its second question: “Buch said her husband used the consulting entities starting in 2019 to transact with unnamed ‘prominent clients in the Indian industry’. Do these include clients Sebi is tasked with regulating?”

“Sebi was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms Buch was personally invested in and funds by the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest,” Hindenburg added.

Hindenburg said Puri-Buch had promised her “commitment to complete transparency”.

“Given this, will she publicly release the full list of consulting clients and details of the engagements, both through the offshore Singaporean consulting firm, the Indian consulting firm and any other entity she or her husband may have an interest in,” Hindenburg shot back.

“Finally, will the Sebi chairperson commit to a full, transparent and public investigation into these issues?” the US short seller asked.