Hindenburg Research accuses SEBI Chairperson Madhabi Puri Buch of a conflict of interest over her past investments. SEBI’s code of conduct, and what lies ahead for India’s market regulator.

The financial world has been rocked once again by a report from U.S.-based Hindenburg Research. This time, the allegations are not just against the Indian conglomerate, the Adani Group, but against Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (SEBI). The report suggests that Buch might have a conflict of interest, raising serious questions about SEBI’s role as India’s stock market regulator. As this situation unfolds, we delve into the charges, SEBI’s code of conduct guidelines, and whether these actions point to a potential conflict of interest.
The Hindenburg Research Allegations Against SEBI Chairperson
Hindenburg Research, already infamous for its report accusing the Adani Group of corporate malfeasance, has turned its attention to the head of SEBI. The latest report, published late on a Saturday, claims that Madhabi Puri Buch may be compromised in investigating the Adani Group due to an alleged conflict of interest involving an investment made by her and her husband in a fund linked to the controversy.
Hindenburg alleges that SEBI is reluctant to fully investigate the charges related to the Adani Group’s stock manipulation and breach of minimum public shareholding norms. The reason for this hesitation, according to the report, is that Buch and her husband had jointly invested in a fund with ties to the Adani “money siphoning scandal.” This has raised questions about SEBI’s independence and effectiveness as a regulatory body.
The specific claim is that Madhabi Puri Buch, along with her husband Dhaval Buch, had invested in a fund managed by Anil Ahuja, a childhood friend of Dhaval and the Chief Investment Officer of the fund in question. Mr. Ahuja was also a director of Adani Enterprises until 2017, further entangling the web of connections.
Buch’s Defense: The Timeline of Events and Adani Group investigation
Both Madhabi Puri Buch and her husband were quick to issue a statement in response to the Hindenburg Research report. According to the couple, their investment in the fund was made in Singapore when they were still private citizens, well before Madhabi Puri Buch became SEBI Chairperson. They clarify that the investment was initiated in 2015 and was fully redeemed in 2018 before Buch took on her role as a SEBI member.
The couple’s defense hinges on the claim that at no point did the fund invest in any bonds, equities, or derivatives of the Adani Group. Moreover, the Buchs stress that Madhabi’s involvement with the fund ceased before she joined SEBI, eliminating any possibility of a conflict during her tenure.
SEBI Code of Conduct: What Are the Guidelines?
The core of this controversy revolves around SEBI’s code of conduct guidelines, which aim to prevent conflicts of interest and ensure that the regulator’s officials remain impartial. SEBI’s rules are clear: all officials must maintain independence and avoid situations that could impair their ability to act without bias.
As the apex regulatory body for Indian financial markets, SEBI is responsible for ensuring transparency, protecting investors, and maintaining orderly functioning of the stock market. To uphold these objectives, SEBI officials must disclose any potential conflicts of interest, abstain from related decision-making processes, and adhere to ethical practices.
The fact that Madhabi Puri Buch disclosed her prior business dealings and transferred her shares to her husband when she took up her SEBI position indicates a level of transparency. However, the issue that arises is whether the connection to the fund and the Adani Group, albeit distant, compromises her ability to act without prejudice in the current investigation.

The Alleged Conflict of Interest
The conflict of interest, as alleged by Hindenburg Research, centers on Buch’s previous investment ties with the fund and the Adani Group. Although the couple claims that the investment was redeemed in 2018 and that the fund had no connection to Adani during their involvement, the optics of the situation may still raise eyebrows. The fact that the Chief Investment Officer of the fund, Anil Ahuja, had a direct connection to the Adani Group through his role as a director only complicates matters further.
The question then arises: do these ties constitute a breach of SEBI’s code of conduct? And, more importantly, do they impair the regulator’s ability to conduct a fair and impartial investigation into the Adani Group’s dealings?
At this juncture, no formal charges have been brought against Buch by Indian authorities, and SEBI has continued its investigations into the Adani Group. However, the allegations could damage SEBI’s credibility as an impartial market regulator if not thoroughly addressed.
What Lies Ahead for SEBI and Madhabi Puri Buch?
The immediate challenge for SEBI is to ensure that its investigations into the Adani Group continue without any interference or undue influence. To maintain public confidence in the regulatory process, SEBI must demonstrate transparency and impartiality in its dealings, particularly when high-profile cases such as the Adani-Hindenburg scandal are involved.
As for Madhabi Puri Buch, she may need to navigate the fallout from these allegations carefully. Even if no direct wrongdoing is found, the controversy could still damage her reputation as SEBI Chairperson. The emphasis now must be on full disclosure, cooperation with any inquiries, and taking steps to reinforce the independence and integrity of SEBI.
The future also holds implications for the larger regulatory landscape in India. If the allegations prove credible, it could spur a reevaluation of SEBI’s code of conduct and the way it enforces compliance among its officials. Regulatory bodies must be beyond reproach, and any perception of a conflict of interest can undermine trust in the entire system.
In a Nutshell
The allegations brought forth by Hindenburg Research against SEBI Chairperson Madhabi Puri Buch have raised concerns about the impartiality and integrity of India’s stock market regulator. While the Buchs have provided their defense, citing the timeline of events and clarifying that their investments were unrelated to the Adani Group, the controversy has sparked wider debate on conflicts of interest within regulatory bodies.
Ultimately, SEBI must act decisively to uphold its mandate and maintain public confidence in its ability to regulate without bias. The outcome of this situation could have lasting repercussions for both SEBI and the Indian financial markets as a whole.
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