U.S. based short-seller Hindenburg Research alleged on Saturday that the head of India`s market regulator, Madhabi Puri Buch, previously held investments in offshore funds also used by the Adani Group.
In a late night press statement, Buch said the report`s allegations were baseless.
A personal statement from Buch on Sunday said that all disclosure requirements had been followed diligently and that investments in the fund referred to in the Hindenburg report were made in 2015 in a private capacity, two years before she joined the Securities and Exchange Board of India.
India`s markets regulator also asked investors to remain calm and exercise due diligence before reacting to such reports.
Hindenburg`s report sparked fresh criticism from India`s opposition political parties, which demanded a parliamentary investigation.
Citing whistleblower documents, Hindenburg said that Buch and her husband held stakes in an offshore fund where a substantial amount of money was invested by associates of Vinod Adani, brother of Adani Group Chairman Gautam Adani.
Adani Group on Sunday rejected the allegations and said its overseas holding structure was fully transparent.
The conglomerate`s spokesperson described the Hindenburg allegations as "no more than red herrings thrown by a desperate entity with total contempt for Indian laws".
"Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing," the spokesperson said.
In January 2023 Hindenburg released a report alleging improper use of tax havens and stock manipulation by Adani Group, setting off a $150 billion sell-off in the conglomerate`s shares despite its denials of wrongdoing. The shares have since made a partial recovery.
The 2023 report also led to an inquiry by the regulator Buch heads, which is still under way. In May six Adani Group companies disclosed they had received notices from SEBI alleging violation of Indian stock market rules.
Alongside the inquiry into Adani Group, SEBI sent a "show cause" notice to Hindenburg, alleging the short-seller violated India`s rules by setting up a short-bet using non-public information.
Hindenburg in July called those allegations "nonsense".
In its new report, Hindenburg attempts to link offshore funds that traded in Adani Group shares with personal investments of Buch and her husband.
It says the Bermuda-based Global Opportunities Fund, which the Financial Times said was used by entities connected to Adani Group to trade in the shares of group companies, had sub-funds.
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