CONFLICT OF INTEREST ALLEGATIONS IN ADANI GROUP SEBI PROBE

Why in the news?

Hindenburg Research claims SEBI Chairperson’s stake in a fund linked to Adani Group raises conflict of interest concerns amid ongoing regulatory investigations.

CONFLICT OF INTEREST ALLEGATIONS IN ADANI GROUP SEBI PROBE - UPSCsource:wordpress

About Hindenburg Report and Allegations:

  • Hindenburg Research claimed SEBI Chairperson Madhabi Puri Buch and her husband held a stake in IPE Plus Fund 1 (Mauritius) since 2015, part of the structure used by two overseas funds under investigation by SEBI.
  • The investigation relates to opaque fund flows into Adani Group companies since 2020.
  • Allegations were made that the SEBI Chairperson’s involvement in the fund raises potential conflict of interest issues.

SEBI’s Response and Institutional Safeguards:

  • Former SEBI officials suggested that Buch should have recused herself from the investigation and disclosed her investments in the fund.
  • Buch and her husband issued a statement asserting that all disclosures and recusals were diligently followed per SEBI’s code of conduct.
  • SEBI had served a show cause notice to Hindenburg, which responded by attacking SEBI’s credibility.
What is Hindenburg Research?

  • Founded: 2017 by researcher Nathan Anderson.
  • Named After: The 1937 Hindenburg disaster, a man-made and avoidable airship explosion.
  • Specialisation: Forensic financial research.
  • Focus Areas: Investigations into accounting irregularities, unethical business practices, and undisclosed financial issues.
  • Notable Investigation: Electric car company Nikola.