Hindenburg-Adani case: Market experts disagree about allegations and “sensationalism”; report “lacks solid evidence”

X (formerly Twitter) faced a fierce reaction on Sunday after Hindenburg Research made explosive allegations against SEBI chairperson Madhabi Puri Buch and her husband Dhaval Buch. The research firm, known for its critical reports, accused the couple of investing in offshore funds with links to the Adani Group, raising doubts about SEBI's impartiality.

In a blog post published late Saturday, Hindenburg suggested that SEBI's hesitation to respond to its January 2023 report on Adani Group could be related to Buch's alleged investments. The report specifically referenced investments in IPE Plus Fund 1, a fund registered in Mauritius, and the Bermuda-based Global Dynamic Opportunities Fund. According to Hindenburg, these funds had links to Vinod Adani, the elder brother of billionaire Gautam Adani, whom the firm had previously accused of orchestrating “the biggest fraud in corporate history.”

The Buchs immediately rejected the allegations and described them as “baseless” and an attempt to “destroy their reputation”.

What did experts say?

The allegations sparked a heated debate on Twitter, with several prominent voices joining in. Deepak Shenoy, a well-known market commentator, criticized Hindenburg's report, tweeting: “I think that's all. Basically, they've gone into sensationalism. There's hardly any substance.”

Gurmeet Chadha, managing partner and CIO of Complete Circle Capital, took a broader view, arguing that the allegations were part of a “systematic attack” on Indian institutions. “RBI and SEBI are among the best in the world. Don't overreact and let the facts come out. This is not an isolated incident!” Chadha tweeted.

Others, like Mohandas Pai, former CFO of Infosys, condemned the report more directly, calling it “character assassination by a vulture fund” and dismissing the allegations as “sensationalist nonsense.”

Intellectual property lawyer Safir Anand also commented, saying Hindenburg's actions were a sign of desperation. “It's clear to me that Hindenburg is desperate to avoid a rising market. A flop will leave them desperate to avoid many consequences, including legal action,” tweeted Anand.

Defence lawyer Jai Anant Dehadrai criticised the report for lacking solid evidence and said: “Routine investment vehicles are exaggerated in the report to create the impression of ill-gotten and opaque wealth. No criminal court in the world would take note of this 'material' as there is no criminal offence.”