Lokpal Of India
Lokpal of India

The head of capital markets regulator SEBI, Madhabi Puri Buch, has come under fire for alleged conflicts of interest and wrongdoing, but anti-corruption ombudsman Lokpal has stated that the allegation “falls short” of convincing the regulator to launch an investigation.

It requested affidavits from the complainants detailing their efforts “to verify the authenticity and credibility of the claims in the recent report of Hindenburg Research published on 10.08.2024” when making decisions regarding two complaints submitted by various parties based on a report by US-based “activist short-seller” Hindenburg Research. In accordance with the Lokpal’s order dated September 20, which was made public “to obviate the possibility of speculation and misinformation including politicization of the matter,” it also asked them to specify the accusations made against the “person concerned” that could, in the words of the Lokpal, constitute a “offence of corruption” within the meaning of the Prevention of Corruption Act, 1988, “provision wise.”

According to Hindenburg Research’s investigation, Buch and her spouse have investments in unidentified offshore funds linked to the purported Adani money-spying controversy.

The pair refuted the accusations, claiming the short seller was attempting a character assassination and undermining the integrity of the financial markets regulator. The claims made by Hindenburg Research were likewise described by Adani Group as malicious and the misuse of particular public data.

In the eighteen months since the release of its devastating report on Adani, Hindenburg had declared, “SEBI has shown a surprising lack of interest in Adani’s alleged undisclosed web of Mauritius and offshore shell entities.” It is claimed that obscure offshore funds in Mauritius and Bermuda, purportedly under the direction of Vinod Adani, the elder brother of the company’s chairman Gautam Adani, were utilized to round-trip money and boost stock prices.

Hindenburg Research’s recent study, which was published on August 10, 2024, contained assertions that the Lokpal sought data about, including the steps made by the respective complainant to verify their legitimacy and veracity.

We explicitly state that the remarks made thus far in the relevant complaint and/or overall may not be interpreted as Lokpal’s view expressed in any manner.

The Lokpal chairperson Justice A M Khanwilkar and three other members, Justices L Narayana and Narayana, issued an order, which states, “This direction is only a procedural order, issued for testing the question of tenability of the concerned complaint and to record a prima facie view as required under Section 20 of the Act of 2013, in the peculiar fact situation.”