Mumbai: US-based short-seller Hindenburg Research is attacking capital markets regulator Sebi's credibility and attempting a character assassination of its chief, Madhabi Puri Buch and her husband Dhaval on Sunday.


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In a detailed statement issued this evening, the Buchs clarified the raft of allegations made by Hindenburg in a report on Saturday.


"They have chosen to attack the credibility of Sebi and attempt character assassination of the Sebi chairperson," the statement said. Hindenburg had alleged that it suspects Sebi's unwillingness to act against Adani Group may be because Madhabi had stakes in offshore funds linked to the conglomerate. The Buchs had immediately termed the allegations "baseless" in an early morning statement.


While Madhabi serves as the chairperson of Sebi, her husband is a senior advisor with Blackstone. In the fresh statement, the Buchs said their investment in a fund promoted by IIFL Wealth Management was as Singapore-based private citizens and made two years before Madhabi joined Sebi as a whole-time member in 2017.


According to the statement, Buchs decided to invest in the two funds on the advice of Dhaval's childhood friend, Anil Ahuja. Ahuja is the person who the Hindenburg report has identified as the founder and Chief Investment Officer of Mauritius-based IPE Plus Fund and who the Adani Group also in its statement said was a nominee of 3i Investment Fund in Adani Power (2007-2008) and served as a director of Adani Enterprises for three terms spanning nine years ended June 2017.


Citing Ahuja's statement, the Buchs said that at no point did the fund invest in any bond, equity, or derivative of any Adani Group company.


On the Hindenburg report's concerns surrounding Dhaval's association with Blackstone, the Buch couple said the appointment was on account of his deep expertise in supply chain management and predates Madhabi's elevation of becoming the Sebi chairperson. "At no time has Dhaval been associated with the real estate side of Blackstone," they added.


They also clarified that immediately on Dhaval's appointment, the Blackstone Group was added to Madhabi's "recusal list" maintained with Sebi.


Making it clear that all the regulations in Sebi are approved by its board and not by the chairperson, the statement said insinuations of a handful of the decisions concerning the Real Estate Investments Trusts industry are favours to specific party are "malicious and motivated".


They said in the last two years, Sebi has issued over 300 circulars across the entire market ecosystem and these include ease of doing business initiatives.


On Madhabi's two consulting firms, the couple said the entities became "dormant" on her appointment at Sebi and added that her shareholding in them was also disclosed to Sebi.


However, it also added that on Dhaval's retirement from Unilever, he started a consultancy practice through the same companies and worked for prominent clients in India.


Linking the earnings in the consultancy companies to Madhabi's current government salary is "malicious", the statement said. In the report, Hindenburg alleges that Madhabi "currently" has a 99 per cent ownership in an Indian consulting business called Agora Advisory where her husband is a director.


"When the shareholding of the Singapore entity moved to Dhaval, this was once again disclosed, not just to Sebi, but also to the Singapore authorities and the Indian tax authorities," it said adding that Sebi has strong institutional mechanisms on disclosure and recusal norms.


The statement reminded all that Hindenburg has been served a show cause notice for violations in India, and called it "unfortunate" that instead of replying to it, the entity has chosen to attack Sebi's credibility and is an attempt of character assassination of its chief, the statement by Buchs said.