U.S. based short-seller Hindenburg Research in a new report released on Saturday alleged that the chairperson of India’s market regulator Madhabi Puri Buch previously held investments in certain offshore funds that were also used by the Adani group.

Citing whistleblower documents, Hindenburg said Buch and her husband held stakes in an offshore fund where a substantial amount of money was invested by associates of Vinod Adani, brother of Gautam Adani, who is chairman of the Adani group of companies.

Buch denied the report’s allegations as baseless.

Buch said on Sunday that all the requirements of disclosures and recusals have been diligently followed. He added that investments in the fund referred to in the Hindenburg report were made in 2015 in private capacity, two years before joining SEBI.

India’s markets regulator on Sunday asked investors to remain calm and exercise due diligence before reacting to reports such as that by Hindenburg.

The regulator said the allegations made by Hindenburg against the Adani group have been duly investigated by SEBI and 23 out of 24 investigations were completed in March 2024.

In January 2023, Hindenburg released a report alleging improper use of tax havens and stock manipulation by the Adani group, setting off a $150 billion sell-off in the conglomerate’s stocks despite its denials of wrongdoing. The stocks have since recovered partially.

The 2023 report also led to an inquiry by the country’s market regulator, the Securities and Exchange Board of India (SEBI), which is still underway. In May, six Adani Group companies disclosed they had received notices from SEBI alleging violation of Indian stock market rules.

Alongside the inquiry into the Adani group, SEBI sent a “show cause” notice to Hindenburg Research alleging that the short-seller violated the country’s rules by setting up a short-bet using non-public information.

Hindenburg Research said these allegations were “nonsense” in a note published on its website in July, which also made public the regulator’s notice.

In its latest report, Hindenburg attempts to draw a link between offshore funds that traded in Adani Group shares and personal investments of Buch and her husband.

It says that Bermuda-based Global Opportunities Fund, which according to a Financial Times investigation was used by entities connected to the Adani group to trade in share of group companies, had sub-funds.
Buch and her husband were investors in one of these sub-funds in 2015, Hindenburg alleged, citing whistleblower documents.

In 2017, before Buch was appointed as a whole-time member, second highest ranking office at Securities and Exchange Board of India (SEBI), her husband requested to be the sole operator of the account, Hindenburg said, citing whistleblower documents.

Later in 2022 she was appointed as head of the regulatory body.

“We think our findings raise questions that merit further investigation. We welcome additional transparency,” Hindenburg said.