Govt Denies Interference, Labels Hindenburg Report Malicious

Key Points:

1. Hindenburg alleges links between Sebi chief and Adani Group
2. Government dismisses allegations as malicious and market manipulation
3. Adani shares decline significantly
4. Buch denies wrongdoing, claims investments were made before Sebi role
5. Political pressure mounts for Buch’s resignation and JPC inquiry

The Indian government has distanced itself from the escalating controversy surrounding Sebi chief Madhabi Puri Buch and Hindenburg Research. Senior officials have dismissed the short-seller’s allegations about Buch’s offshore investments as “untrue and malicious,” suggesting a potential motive of market manipulation.

Hindenburg has accused Buch and her husband of holding stakes in offshore funds linked to the Adani Group. The report claimed these funds were used to amass large positions in Adani Group shares. However, 360 ONE Asset Management, a key entity in the controversy, has denied investing in Adani Group shares.

Government Accuses Hindenburg of Targeting Indian Markets
The government believes Hindenburg’s report is a deliberate attempt to undermine India’s financial markets. They argue that the short-seller is exploiting a period of strong economic growth to discredit the regulator. Despite the recent market volatility caused by the allegations, officials express confidence in the market’s resilience.

Sebi has defended its chairperson, stating that Buch has been transparent in her disclosures. The regulator also urged investors to remain calm and exercise due diligence.

Adani Shares Plummet Amidst Controversy
Shares of Adani Group companies took a significant hit following the release of the Hindenburg report. The combined market capitalization of the 10 Adani stocks fell by approximately Rs 53,000 crore.

Buch and her husband have denied any wrongdoing, asserting that the investments were made before her appointment to Sebi and are now dormant.

Political Fallout
The Hindenburg-Sebi row has ignited a political firestorm. Opposition leaders have demanded Buch’s resignation and a Joint Parliamentary Committee (JPC) investigation. Congress leader Rahul Gandhi has accused Sebi of compromised integrity due to the allegations against its chairperson.

The controversy has raised questions about the regulator’s ability to impartially handle the Adani-Hindenburg dispute.