In response to allegations by US-based short-seller Hindenburg Research, the Securities and Exchange Board of India (SEBI) issued a detailed statement defending its chairperson Madhabi Puri Buch and its regulatory actions. The statement addresses concerns about potential conflicts of interest and reassures investors about the integrity of SEBI’s processes.
SEBI’s Clarification
- Recusal and Disclosure: SEBI confirmed that Chairperson Madhabi Puri Buch made all relevant disclosures and recused herself from matters involving potential conflicts of interest. This was in direct response to Hindenburg’s claims about her holding stakes in offshore entities linked to the Adani case.
- Investigation Update: SEBI also stated that it has thoroughly investigated the allegations made by Hindenburg against the Adani Group. Out of 26 investigations, 22 have been completed, with one more nearing completion.
Hindenburg’s Allegations and SEBI’s Response
- Alleged Bias in REIT Regulations: Hindenburg accused SEBI of making changes to the SEBI (REIT) Regulations 2014 to benefit a multinational financial conglomerate. SEBI refuted this, explaining that any changes to regulations undergo a robust consultation process involving industry feedback, investor input, and public consultation.
- Show Cause Notice to Hindenburg: SEBI addressed concerns over its show cause notice to Hindenburg Research issued in June 2024. The regulator emphasized that this notice was issued following due legal process and is part of ongoing proceedings.
SEBI’s Assurance to Investors
SEBI urged investors to remain calm and exercise due diligence in light of the allegations. The regulator highlighted the disclaimer in the Hindenburg report, which suggests that the firm may have short positions in the securities covered.
SEBI’s detailed statement aims to reassure the public about the integrity of its processes and the transparency of its regulatory actions. As the investigation into the Adani Group nears completion, SEBI remains committed to maintaining the trust of investors and upholding the principles of natural justice.
