India’s stock market regulator has urged investors to “remain calm” and exercise “due diligence” after US-based short seller Hindenburg Research leveled fresh allegations at Adani Group over the weekend in the latest turn in a long-running controversy. 

In a report released on Saturday, Hindenburg claimed that the chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, and her husband Dhaval Buch, had held stakes in “obscure offshore funds” that the firm exposed last year in relation to alleged “stock market manipulation” by Adani Group. Hindenburg also questioned the delay in launching a probe against Adani Group and SEBI’s objectivity in the case. 

Adani Group’s stock saw significant volatility on Monday after the fresh allegations. According to Reuters, $2.43 billion, or 1%, had been wiped off the market value of Adani companies by the end of the trading day.  

Both the conglomerate, which is led by billionaire Guatam Adani, and the SEBI chairperson have denied Hindenburg’s allegations.   

In a statement issued late Sunday, the regulator noted that the allegations made by Hindenburg against the Adani Group had already been duly investigated by SEBI and that 23 out of the 24 investigation were completed in March 2024, while the one remaining is close to completion. The regulator said it refrains from commenting on any ongoing investigation “as a matter of policy.”  

SEBI defended its chief, saying that Buch had made the relevant disclosures required for holding securities. “It is emphasized that SEBI has adequate internal mechanisms for addressing issues relating to conflict of interest,” the regulator noted. Madhabi Buch, in a separate statement, claimed that her investment in offshore funds mentioned in the Hindenburg report were made in 2015, two years prior to her joining SEBI.  

Meanwhile, the Association of Mutual Funds in India on Monday criticized Hindenburg’s report for attempting to undermine the SEBI chief’s credentials, as well as India’s economic progress. The body also called the US firm’s move an attempt to “create sensation by connecting random events done in the past.” 

In  June, the Indian regulator issued a show cause notice to Hindenburg, accusing the firm of making “unfair” profits from “collusion” with New York-based hedge fund manager Mark Kingdon to profit from the market rout in Adani Group stock. The short-seller called the notice “nonsense.” 

Hindenburg released its first report claiming the Adani Group was “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades” in January 2023. This caused the valuation of the group to fall by around $145 billion at its lowest point. Later, Organized Crime and Corruption Reporting Project, an international investigative platform known for its work on the Panama Papers and Pandora Papers, published their own investigations of alleged stock manipulation by Adani Group.

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