SEBI’s Inaction on Adani Scandal: Questions Arise Over Potential Regulatory Bias

In the wake of new revelations about SEBI Chairperson Madhabi Buch’s ties to offshore funds involved in the Adani Group scandal, concerns are mounting over SEBI’s lack of decisive action against the Adani Group. Despite overwhelming evidence and multiple independent investigations corroborating allegations of financial misconduct, SEBI has yet to take meaningful steps against the conglomerate.

The Hindenburg report, first released 18 months ago, detailed a complex web of offshore entities, primarily based in Mauritius, used by the Adani Group for suspected undisclosed transactions and stock manipulation. Despite the report and over 40 subsequent investigations by independent media, SEBI’s response has been underwhelming. Reports suggest that SEBI may impose only token, technical violations rather than addressing the broader implications of the scandal.

Adding to the controversy, a recent ‘show cause’ notice from SEBI to Hindenburg Research questioned the adequacy of disclosure regarding the firm’s short position, but did not address the factual accuracy of the report’s findings. This move has been criticized as a diversion from the core issues highlighted in the investigation.

In late June 2024, Adani CFO Jugeshinder Singh dismissed regulator notices aimed at the Adani Group as “trivial,” suggesting that the company anticipated minimal repercussions despite the serious allegations.

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The Supreme Court of India has criticized SEBI for its ineffective investigation into the offshore shareholders linked to Adani. According to the court, SEBI has failed to make significant progress in uncovering the funding sources behind these offshore entities.

The ongoing inaction by SEBI raises questions about potential regulatory bias, particularly in light of recent findings connecting SEBI Chairperson Madhabi Buch to the same offshore funds implicated in the scandal. The revelation that Buch and her husband had stakes in these entities adds a layer of complexity to the case, prompting calls for an independent investigation into SEBI’s role and potential conflicts of interest.

As scrutiny intensifies, stakeholders and the public are demanding greater transparency and accountability from SEBI. The pressure on the regulator to act decisively is growing, with many questioning whether SEBI can be trusted to impartially address the issues surrounding the Adani Group.