REIT And Alternate Capital Bodies Rally Behind SEBI Chief After Hindenburg Allegations

The IRA dismissed the claims made by Hindenburg, stating that the accusations suggesting the REIT framework established by SEBI serves the interests of a select few are 'baseless and misleading'

Hindenburg Allegations: Industry groups representing Real Estate Investment Trusts (REITs) and alternate capital came forward on Monday to support embattled Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch. This comes in the wake of allegations by US short-seller Hindenburg Research that Buch and her husband held stakes in obscure offshore funds linked to Adani Group.

The Indian REITs Association (IRA) dismissed the claims made by Hindenburg, stating that the accusations suggesting the REIT framework established by SEBI serves the interests of a select few are "baseless and misleading." The association praised SEBI under Buch’s leadership for creating a "rigorous regulatory environment" characterised by comprehensive periodic reporting requirements, mandatory independent valuations, and stringent governance standards.

"Developed in consultation with all market participants, this framework ensures the highest levels of investor protection for both domestic and international institutional investors, as well as retail investors," the IRA said in its statement.

Echoing similar sentiments, the Indian Venture and Alternate Capital Association (IVCA) voiced its firm support for Buch during these "challenging times." The IVCA lauded the markets regulator for its "unwavering commitment to market integrity, regulatory governance, and investor protection."

The statements from IRA and IVCA follow a day after the Association of Mutual Funds in India (Amfi) also backed Buch, condemning the short-seller's report as an attempt to undermine her contributions to the Indian capital market and the country’s economic progress.

"Creating a trust deficit in the market ecosystem must be recognised for what it truly is — an attempt to create sensation by connecting random past events," the industry body said.

Hindenburg Research launched a broadside against the SEBI chief on Saturday, accusing Buch and her husband Dhaval Buch of holding stakes in offshore funds allegedly linked to a money siphoning scandal involving Vinod Adani, elder brother of Adani Group's Gautam Adani. The short-seller also flagged Dhaval's association with private equity major Blackstone, a promoter of multiple REITs, and questioned SEBI’s continued support for the investment avenue.

In response, Buch and her husband strongly denied the allegations, calling them baseless and asserting that their financial records are transparent. SEBI defended its chairperson, stating that Buch had made all relevant disclosures and had recused herself from matters involving potential conflicts of interest. The regulator noted that only one out of 24 investigations into Adani Group remains pending.

The Adani Group has also refuted the allegations, describing them as malicious and based on selective manipulation of public information. The company asserted that it has no commercial relationship with the SEBI chairperson or her husband.

Without directly naming Hindenburg, the IRA reiterated in its statement that "recent claims suggesting that the REIT framework serves the interests of a select few are baseless and misleading." The association highlighted that since its inception in 2014, there are now four listed REITs managing assets worth over Rs 1.4 lakh crore, serving over 2.4 lakh unitholders. It added that the participation of prominent global institutional investors in REITs underscores the trust and credibility of India’s financial system.

In its statement, the IVCA highlighted SEBI's crucial role in maintaining the integrity and stability of the financial ecosystem. "We believe that the recent allegations made by Hindenburg are unwarranted and do not reflect a deep understanding of the Indian regulatory environment," it added.