Congress Poses 13 Questions To SEBI Chief Over Hindenburg Allegations, Renews Pitch For JPC & Supreme Court Probe

The Congress demanded answers from SEBI Chairperson Madhabi Buch and the Modi Government over the latest Hindenburg allegations while also pressing for JPC and Supreme Court investigations.

The Congress Party has intensified its demand for a Joint Parliamentary Committee (JPC) investigation following allegations made by Hindenburg Research against the Securities and Exchange Board of India (SEBI) Chairperson Madhabi Buch which suggest a significant conflict of interest in SEBI's handling of the Adani Group probe. Notably, both the SEBI chief and the Adani Group have dismissed the allegations. Buch in a detailed counter said that SEBI has robust ‘institutional mechanisms of disclosure and recusal norms’ and made all the required disclosures. 

The Adani Group has also dismissed the allegations, terming them "malicious" and based on a manipulation of selective public information. The conglomerate stated that it has no commercial relationship with SEBI Chairperson Buch or her husband.

In a presser, Congress spokesperson Supriya Shrinate drew a stark comparison to a village where the headman collaborates with bandits, allowing unchecked looting. "This is exactly what's happening in the Adani mega scam," Shrinate stated. She accused SEBI of failing to conduct a thorough investigation due to the alleged vested interests of its chief, Madhabi Buch.

Shrinate elaborated on the accusations from the Hindenburg report, which allege that Madhabi Buch and her husband held investments in offshore funds linked to Vinod Adani, the brother of industrialist Gautam Adani. She questioned SEBI's credibility, saying, "Was SEBI unable to investigate the Adani mega scam because the investigator was herself involved in the scam?"

The report also claimed that Buch transferred her shares in these offshore funds to her husband's name just a week before being appointed as SEBI Chairperson. Highlighting this, Shrinate asked, "Did SEBI Chairperson Madhabi Buch transfer her shares to her husband to hide her links to the Adani Group?"

Shrinate further pointed to the report's findings regarding Buch's involvement with Agora Partners, a consulting firm in Singapore. "During her tenure as a full-time SEBI member, Madhabi Buch held a 100% stake in an offshore Singaporean consulting firm, Agora Partners, which she only transferred to her husband after becoming SEBI Chairperson," she remarked, questioning the potential conflict of interest this posed.

Additionally, Shrinate raised concerns over Buch's alleged regulatory bias towards Blackstone, a significant player in Real Estate Investment Trusts (REITs), during her tenure. "Hindenburg has accused the SEBI Chief of benefiting companies like Blackstone through regulatory changes," she noted, pointing out that Buch’s husband became a senior advisor at Blackstone during her term as SEBI Chairperson.

Shrinate posed 13 questions directly to Buch, challenging her to clarify her financial dealings and connections to the Adani Group. "Did you disclose your shareholding in these offshore funds to SEBI? Why didn't you recuse yourself from the Adani investigation given your conflicts of interest?" Shrinate asked, demanding transparency.

"Before informing the Supreme Court that SEBI had found nothing, did you notify the court-appointed committee or the Supreme Court that you or your husband had been investors in some of the funds under investigation?" she asked.

"Given these serious allegations, should SEBI Chief Madhabi Buch remain in her position, or should she be dismissed immediately?" she added.

The Congress spokesperson also criticised the Modi government, implying that the Prime Minister's alleged protection of Adani facilitated this collusion. "Without the protection of Prime Minister Modi, could such a collusion between Adani and the SEBI Chief have occurred?" Shrinate questioned.

"SEBI, the regulator of India's stock markets, has lost all credibility. Who will now ensure the protection of small investors? When the market falls, will Gautam Adani, Madhabi Buch, and Narendra Modi not be responsible for the destruction of investors' wealth?" she asked.

"We claim to be a global guru, but this scandal is a stain on India's stock market regulator, which could destroy the credibility of our financial markets in one blow. How will we reassure global and domestic investors that our market upholds the rule of law?" the Congress leader sought to know.

In her concluding remarks, Shrinate called for the Supreme Court to take suo motu cognisance of the Hindenburg revelations. "Given the serious and shocking nature of the allegations in the Hindenburg Research report, we appeal to India's highest constitutional court to investigate this scam under its own supervision," she urged.

Shrinate asserted that Madhabi Buch could no longer remain in her position amidst these grave allegations. "She must be immediately removed from her post," she declared, emphasising the need for a JPC probe to restore the credibility of India's institutions.

Hindenburg-SEBI Row — 'Umpire Herself Is Compromised': Congress MP Rahul Gandhi

Lok Sabha Leader of Opposition and Congress MP Rahul Gandhi also voiced serious concerns. “It is my duty as Leader of Opposition to bring to your notice that there is a significant risk in the Indian stock market because the institutions that govern the stock market are compromised,” Gandhi stated. He described the allegations as explosive, highlighting that Buch’s involvement with offshore funds linked to the Adani Group undermines the integrity of the regulator. “This is an explosive allegation because it alleges that the umpire herself is compromised,” Gandhi added.

Gandhi questioned why SEBI Chairperson Madhabi Buch has not yet resigned and called for accountability if investors lose their hard-earned money. “Honest investors across the country have pressing questions for the government—why hasn’t SEBI Chairperson Madhabi Buch resigned yet? If investors lose their hard-earned money, who will be held accountable—PM Modi, the SEBI Chairperson, or Gautam Adani?” Gandhi demanded.

He also expressed concerns over the Prime Minister's opposition to a JPC investigation. “New and very serious allegations have surfaced; will the Supreme Court look into this matter suo moto once again? It is now abundantly clear why Prime Minister Modi is against the JPC looking into this matter,” Gandhi concluded.

Hindenburg-SEBI Row: Congress Chief Kharge Alleges 'Massive Scandal'

In a statement on Sunday, Congress President Mallikarjun Kharge urged the government to address these conflicts immediately. He emphasised the need for a JPC inquiry into what he described as a "massive scandal," particularly to protect small and medium investors who rely on SEBI's integrity.

Kharge alleged that SEBI had previously cleared Adani before the Supreme Court following the January 2023 Hindenburg Report, and he expressed concerns that the new allegations suggest a quid-pro-quo involving the SEBI chief. "Concerns persist that PM Modi will continue to shield his ally, compromising India's Constitutional institutions, painstakingly built over seven decades," Kharge remarked on X (formerly Twitter).

Congress General Secretary Jairam Ramesh echoed these concerns, questioning SEBI's reluctance to investigate the Adani Group, as noted by the Supreme Court's Expert Committee. Ramesh highlighted that SEBI had diluted reporting requirements related to the ultimate beneficial ownership of foreign funds in 2018, and entirely deleted these requirements in 2019. This, according to Ramesh, has "tied SEBI's hands" and contributed to the regulator's failure to find evidence worldwide.