New Delhi: Madhabi Puri Buch, the SEBI chairperson, is facing criticism following Hindenburg's latest report, which highlights her promotion of real estate investment trusts (REITs) as a promising asset class. The report alleges that she failed to disclose her husband's role as an adviser to Blackstone Inc., a company that has sponsored two of the four listed REITs in India.


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Despite Buch's recent statements denying any conflict of interest regarding her involvement in "obscure offshore funds" linked to the Adani money syphoning scandal, questions remain about her connections to other businesses.


The Morning Context reports that Buch's ties to Blackstone, a major American private equity firm with significant investments in India, raise serious concerns about potential conflicts of interest. An anonymous seasoned fund manager highlighted that Buch's recusal from Blackstone-related matters may not be enough, given the scale of Blackstone's investments in the country.


The relationship between Blackstone and Hindenburg has kept these allegations in the spotlight. SEBI is now under pressure to address the potential conflict of interest stemming from Buch's previous role as a prominent private sector executive before joining the regulatory body.


There is speculation within capital market circles that Buch's influence might hinder her ability to fulfill her regulatory responsibilities effectively. Although Buch claims to have recused herself from all Blackstone-related matters, it is worth noting that Blackstone holds significant stakes in major Indian companies such as Care Hospitals, Mphasis, Aadhar Housing Finance, and ASK Investment Managers, among others.


The Morning Context reports that it remains unclear how many Blackstone companies are on Buch's recusal list or whether she has stepped back in all relevant cases. In February, SEBI, under Buch's leadership, approved the initial public offering (IPO) of Aadhar Housing Finance, a company controlled by Blackstone. Additionally, Blackstone acquired a 75% stake in EPL Ltd (formerly Essel Propack Ltd) through its subsidiary Epsilon Bidco Pte Ltd between April and October 2019.


Neither Buch nor SEBI has yet disclosed the full extent of her recusal from Blackstone-related matters.


Dhaval Buch became a senior adviser at Blackstone in July of 2019. "In April 2019, the Ashok Goel Trust was the buyer of a significant portion of the Blackstone interest (51% of the 75%). Atul Goel is a member of the Ashok Goel Trust's leadership advisory board.


The trust is now categorised as a public stakeholder, yet it still has a sizeable 7.6% interest in EPL. The Morning Context reports that on August 27, 2021, Madhabi Puri Buch, a full-time member of SEBI, resolved an insider trading case against Atul Goel and his business, E-city Hi-tech Projects. This raises serious doubts about Puri-Buch's assertion of recusal in her statement.