Congress flays SEBI's Adani probe, seeks JPC, calls for Buch's resignation

The Congress on Monday (August 12) urged the Supreme Court to transfer the Adani probe to the CBI or a special investigation team (SIT) given the “likelihood of SEBI’s compromise” on the matter.

It also sought a Joint Parliamentary Committee (JPC) to investigate what it described as a “Modani mega scam” involving the “self-anointed non-biological PM and a perfectly biological businessman”.

At the same time, Congress general secretary Jairam Ramesh demanded the resignation of SEBI chairperson Madhabi Buch following the Hindenburg Research’s allegations against her.

SEBI claims hyperactivity

The Congress statement came a day after the SEBI said allegations against the Adani Group have been "duly investigated" and that Buch had recused herself from time to time when dealing with the Adani matters.

Ramesh said in a statement that in the ongoing probe into certain financial transactions of the Adani Group, the Securities and Exchange Board of India (SEBI) has sought to project an image of hyperactivity.

The SEBI had stated that it had issued 100 summons, 1,100 letters and emails, and examined 300 documents containing 12,000 pages.

Ramesh’s letter unanswered

"This must have been very exhausting, but it diverts attention from the core issues involved. Actions matter, not activities," Ramesh said.

"On February 14, 2023, I had written to the SEBI chairperson urging SEBI to play its role as the steward of India's financial markets on behalf of the crores of Indians who have faith in the fairness of India's financial markets. I never received a reply," he said.

On March 3, 2023, the Supreme Court directed the SEBI to "expeditiously conclude the investigation" into allegations of stock manipulation and accounting fraud against the Adani Group within two months, he added.

Finding fault with SEBI

Now, 18 months later, SEBI has revealed that a critical investigation, likely regarding whether Adani violated Rule 19A relating to minimum public shareholding, remains incomplete, he said.

"The fact is that SEBI's seeming inability to close two of its 24 investigations delayed the publication of its findings for over a year."

“This delay conveniently allowed the prime minister to navigate an entire general election without addressing his role in facilitating his close friend's illicit activities," Ramesh said.

SEBI notices to Adani firms

Despite the Adani Group's claims of receiving a “clean chit”, the SEBI has reportedly issued show cause notices to several Adani firms concerning these allegations, the Congress leader said.

However, the slow pace of these investigations, especially compared to the swift 'justice' that the prime minister's investigative agencies usually deliver to Opposition leaders, remains inexplicable, Ramesh said.

"Moreover, recent revelations raise disturbing questions about SEBI's integrity and conduct in investigating the Adani mega scam.”

SEBI’s integrity questioned

"SEBI, long considered a trustworthy global financial market regulator, is now under scrutiny. It is shocking to discover that SEBI chairperson and her husband invested in the same opaque Bermuda and Mauritius-based offshore funds where Vinod Adani and his close associates, Chang Chung-Ling and Nasser Ali Shaban Ahli, also invested," he said.

These funds, he said, were managed by Anil Ahuja, a close friend of the Buchs and an independent director in Adani Enterprises until May 31, 2017, a period that overlapped with the SEBI chairperson's earlier tenure as a whole-time member of SEBI, Ramesh said.

Ramesh’s charges against SEBI

"The illusion that the SEBI chairperson and her husband had separated their finances has been shattered by the revelation that after joining SEBI, she transacted in the fund from her personal email account on February 25, 2018. Ironically, these funds are part of the same vehicles (Global Opportunities Fund and Global Dynamic Opportunities Fund) that Chang and Ahli reportedly used to bypass Rule 19A, the very violation that SEBI is currently investigating," he said.

"While 360 ONE, the fund manager, claimed that IPE Plus 1 Fund made no investments in the Adani Group, it remains silent on whether Vinod Adani, Chang or Ahli were investors in that fund alongside the Buchs.”

“It also fails to clarify the connections between the Global Opportunities Fund, the Global Dynamic Opportunities Fund, and the IPE Plus 1 Fund," Ramesh said.

Conflicts of interest?

The Congress leader claimed that no institution was sacrosanct in 'Amrit Kaal'.

Commenting on the SEBI chairperson’s statement that she recused herself from the Adani investigations, he asked: "Do these conflicts of interest explain the prolonged investigation, a delay that has benefited both Adani and the prime minister while damaging SEBI's reputation? How can a match proceed if the umpire herself is compromised?"

The Supreme Court, empowered by the Constitution, must transfer the investigation to the Central Bureau of Investigation or SIT given the "likelihood of SEBI's compromise", he said.

Buch’s resignation sought

At a minimum, the SEBI chairperson must resign to restore SEBI's integrity, Ramesh stressed.

"However, the Adani mega scam extends beyond the 24 matters under SEBI's investigation It encompasses the source of the Rs 20,000 crore benami funds invested in the Adani Group, the over-invoicing of thousands of crores in coal and power equipment, and the laundering of those proceeds," the Congress leader said.

Additionally, it involves granting of monopolies to the Adani Group in critical infrastructure sectors, and manipulation of Indian foreign policy to secure Adani assets in neighbouring countries like Sri Lanka and Bangladesh which are proving to be highly controversial, he said.

Hindenburg allegations

Hindenburg Research on Saturday launched a broadside against Madhabi Buch, alleging she and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal.

The SEBI chairman and her husband have denied the allegations.

The Adani Group termed the latest allegations malicious and said it has no commercial relationship with the SEBI chairperson or her husband.