New Delhi: SEBI Chairman Madhabi Puri Buch has now publicly confirmed that she invested in an obscure Bermuda/Mauritius fund structure, US short-selling firm Hindenburg Research reported. Buch has been asked to come clean about all advisory clients her offshore Singaporean and Indian advisory firms did business with.

Hours after Buch and her husband issued a statement calling Hindenburg’s latest tirade an attack on SEBI’s credibility and an attempt at “character assassination,” Hindenburg said in a series of messages on X that their response contained several important admissions and raised numerous new critical questions.

“Buch’s response now publicly confirms her investment in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned off by Vinod Adani. She also confirmed that the fund was run by a childhood friend of her husband, who was an Adani director at the time,” the report said.

Hindenburg alleged on Saturday that SEBI Chairman Madhabi Puri Buch and her husband had made undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani, the elder brother of group chairman Gautam Adani, to move funds around and inflate share prices.

In response, Buch and her husband Dhaval Buch said in a joint statement on Sunday that the investments were made in 2015, well before her appointment as a full-time member of SEBI in 2017 and subsequent elevation to its chairman in March 2022, and in the capacity of “private citizens residing in Singapore”. These funds became “dormant” upon her appointment to SEBI.

“SEBI was instructed to investigate investment funds in relation to the Adani matter, including funds in which Ms Buch WAS PERSONALLY INVESTED and funds of the same sponsor that were specifically highlighted in our original report. This is clearly a massive conflict of interest,” Hindenburg said.

According to Buch’s statement, the investment in the two funds was made on the advice of Dhaval’s childhood friend, Anil Ahuja — the person Hindenburg identified on Saturday as the founder and chief investment officer (CIO) of the Mauritius-based IPE Plus Fund and who, according to Adani Group in Sunday’s statement, was also nominated by 3i Investment Fund in Adani Power (2007-2008) and served as a director of Adani Enterprises for three nine-year terms ending in June 2017.

“Buch’s statement also alleges that the two advisory firms she founded, including the Indian entity and the opaque Singaporean entity, “became inactive immediately after her appointment to SEBI” in 2017, with her husband taking over from 2019. As per the latest shareholder list dated March 31, 2024, Agora Advisory Limited (India) is still 99 percent owned by Madhabi Buch, not her husband. This entity is currently active and generating advisory income,” Hindenburg said.

She also remained a 100 percent shareholder in Agora Partners Singapore until March 16, 2022, according to Singapore records, and owned the company throughout her tenure as a SEBI Full Time Member. “She transferred her shares into her husband’s name only two weeks after her appointment as SEBI chairman,” it was alleged.

Madhabi Puri Buch and her husband Dhaval Buch in a joint statement on Sunday strongly denied the “baseless allegations and insinuations in the report” and said the allegations “do not contain any truth”.

SEBI also defended its chairman. In a two-page statement, it said Buch had made relevant disclosures from time to time and that she had “also recused herself from matters relating to potential conflict of interest.” The Adani Group too denied any commercial dealings with the SEBI chief, while asset management firm 360ONE — formerly known as IIFL Wealth Management — separately said Buch and her husband Dhaval Buch’s investment in IPE-Plus Fund 1 was less than 1.5 per cent of its total inflows and that it had no investments in Adani Group shares.

Hindenburg said the Singaporean consultancy firm she founded does not disclose its financials such as revenue or profit and “it is therefore impossible to see how much money this organisation has made during her tenure at SEBI.” “The Indian organisation, which is still 99 per cent owned by the chairman of SEBI, generated revenue (i.e. consultancy) of Rs 2.39 crore during the financial years (’22, ’23 and ’24) when she was chairman, as per the financial statements,” the organisation said.

Hindenburg, citing whistleblower documents, stated that “Buch used her personal email address to conduct business under her husband’s name while she was a full-time member of SEBI.”

“In 2017, weeks before her appointment as SEBI Full Time Member, she ensured that the accounts linked to Adani were registered ‘solely in the name of Dhaval Buch’, her husband, according to whistleblower documents. Despite relinquishing control, a private email she sent a year into her SEBI tenure reveals that she bought back shares in the funds in her husband’s name, according to the whistleblower documents. This begs the question: What other investments or dealings did the SEBI chairman make in her husband’s name while serving in an official capacity?” it asked.

According to Hindenburg, Buch said her husband used the consultancies from 2019 onwards to do business with anonymous “prominent clients in Indian industry”.

“Are these also the clients that SEBI should regulate?” the newspaper asked.

“Buch’s statement promised a ‘commitment to full transparency’. Given this, will she make public the full list of consulting clients and details of engagements, whether through the offshore Singapore consulting firm, the Indian consulting firm or any other entity in which she or her husband may have an interest?” Hindenburg asked.

“Will the SEBI Chairman finally commit to a full, transparent and public inquiry into these issues?” it further asked.