New Delhi: The People’s Commission on Public Sector and Public Services (PCPSPS), a policy consultations body, has questioned the government’s nonchalant attitude towards Hindenburg Research’s latest allegations linking the Adani group with Securities and Exchange Board of India (SEBI).
“We feel that the government cannot afford to adopt such a hands-off indifferent approach and, instead, should clear doubts by ordering a quick, independent investigation to ascertain the factual correctness of the accusations,” it said on Friday (August 16).
Hindenburg Research last week, accused SEBI chief Madhabi Buch and her husband Dhaval Buch of having held “stakes in both the obscure offshore funds used in the Adani money siphoning scandal.”
“While the SEBI chairman may say that she has disclosed the details of her investments to SEBI, since she had been a full-time member of SEBI from April 2017 to March 2022 and the chairman thereafter, it is the government that would have appointed her to those senior positions. If any disclosure were to be made by her, she ought to have made such a disclosure not only to SEBI but also to the Ministry of Finance.
One is not sure whether the Ministry of Finance had been informed of it by her and if the Union Cabinet had also been kept informed. In principle, since Hindenburg had made accusations against her as an individual, she cannot give a clean chit to herself,” PCPSPS said.
The Commission stated that the Buchs issued a statement in their personal capacity to counter the US-based short seller’s allegations. However, this was followed by a rebuttal from Hindenburg Research, along with additional facts revealed through other investigative reports.
Media reports on Monday revealed that the SEBI chief’s consulting firms named in the Hindenburg report did not go dormant, as she had claimed, and one of them was registered at the same address as its statutory auditor. A statutory audit is a legally required review of the accuracy of a company’s financial statements and records. These audits are required to be conducted by third-party firms so as to maintain neutrality.
Overseas shell companies
The Commission also questioned the emergence of a “shadowy economy” that has been allowed to “flourish overseas for unethical private corporate entities to set up dubious shell companies to stash their illicit wealth and round-trip its funds at their will, not only for evading taxes but also for manipulating the domestic stock market to profiteer at the cost of millions of small investors in India.”
“One should not be surprised how such dubious shell companies have also been used to fund the political party in power through several illegal instruments including the infamous Electoral Bonds scheme,” its statement said.
The Commission’s statement is reproduced below.
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PCPSPS Statement on SEBI-Adani-Hindenburg.docx by The Wire on Scribd