Hindenburg Research on late Saturday post has said that the SEBI Chairperson Madhabi Buch and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani.
Vinod Adani is the brother of Gautam Adani, the Indian business tycoon against whom the Hindenburg had levelled allegations through a report in January 2023 of siphoning money.
June 2015:
Madhabi Buch and her husband Dhaval Buch first appear to have opened their account with IPE Plus Fund 1 on June 5th, 2015 in Singapore, per whistleblower documents.
A declaration of funds, signed by a principal at IIFL states that the source of the investment is “salary” and the couple´s net worth is estimated at $10 million.
April 2017:
Madhabi Buch was appointed a Whole Time Member of SEBI in April 2017.
Terming it as a “politically sensitive appointment”, the Hindenburg Report said that just weeks ahead on March 22nd, 2017, Madhabi’s husband, Dhaval Buch, wrote to Mauritius fund administrator Trident Trust, according to documents we (Hindenburg) received from a whistleblower.
The email was regarding his and his wife’s investment in the Global Dynamic Opportunities Fund (“GDOF”), it said.
In the letter, Dhaval Buch requested to “be the sole person authorised to operate the Accounts”, seemingly moving the assets out of his wife’s name ahead of the politically sensitive appointment.
February 2018:
In a later account statement dated February 26th, 2018, addressed to Madhabi Buch’s private email, the full details of the structure are revealed: “GDOF Cell 90 (IPEplus Fund 1)”.
Again, this is the exact same Mauritius-registered “cell” of the fund, found several layers deep in a convoluted structure, reportedly used by Vinod Adani, the report said.
The total value of Buch’s stake was worth U.S. $872,762.25 at the time.
Later, on February 25th, 2018, during Buch’s tenure as a Whole-Time Member of SEBI, whistleblower documents show she personally wrote to India Infoline using her private Gmail account, doing business through her husband’s name, to redeem the units in the fund, the Hindenburg Report highlighted.
June 2019:
The report claimed that in June 2019 Madhabi Buch’s husband was appointed as advisor to Blackstone, a global private equity firm which has been one of the largest investors in real estate investment trusts, or REITs.
Blackstone-backed Mindspace and Nexus Select Trust, the country’s second and fourth largest REITs, were given the green light to go public in August 2020 and May 2023, respectively.
It cited REIT legislations passed by Sebi during Dhaval Buch’s time as advisor to saying that it was “of significant benefit to Blackstone,”
Raises question over stakes in a multi-layered offshore fund
Hindenburg in its report said despite the existence of thousands of mainstream, reputable onshore Indian mutual fund products, an industry she now is responsible for regulating, documents show SEBI Chairperson Madhabi Buch and her husband had stakes in a multi-layered offshore fund structure with miniscule assets, in the same entity run by an Adani director and significantly used by Vinod Adani in the alleged Adani cash siphoning scandal.
“We suspect SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani,” it said.
The IPE Plus Fund 1
The Hindenburg Report said that Vinod Adani, brother of Gautam Adani, controlled company had invested in “Global Dynamic Opportunities Fund” (“GDOF”) in Bermuda, a British overseas territory and tax haven, which then invested in IPE Plus Fund 1, a fund registered in Mauritius, another tax haven.
It cited a separate investigation by the Financial Times saying it showed that the parent fund of GDOF – the Bermuda-based Global Opportunities Fund (“GOF”) – was used by two Adani associates “to amass and trade large positions in shares of the Adani Group”.
These nested funds are managed by Indian Infoline (IIFL), now called 360 One per private fund data and IIFL’s marketing material, it said.
Two layers below the Global Opportunities Fund, is the IPE Plus fund, a small and obscure offshore fund registered in Mauritius.
The IPE Plus Fund had only U.S. $38.43 million in assets under management (AUM) at the end of December 2017, per IIFL disclosures.
