'Investors Should Remain Calm': SEBI Reacts To Hindenburg Research Report, Says Chairperson Madhabi Puri Buch Made Disclosures 'From Time To Time'

Mumbai, August 11: Markets regulator SEBI on Sunday (August 11) issued a detailed statement on the Hindenburg Research report which made allegations against its Chairperson Madhabi Puri Buch and said that Chairperson Buch has been making disclosures. In the two-page statement, SEBI also asked investors to take note of the disclaimer in the report and asked investors to "remain calm" and not to react to the report in a hurry.

"Investors should remain calm and exercise due diligence before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report," SEBI said in a statement on the Hindenburg report.

Stating that the regulator has the needed internal mechanisms for addressing conflict of interest issues, SEBI said: "Relevant disclosures required in terms of holdings of securities and their transfers have been made by the Chairperson from time to time. Chairperson has also recused herself in matters involving potential conflicts of interest."

The regulator also added that out of the 24 investigations on allegations made in the Hindenburg report, investigation is pending in only one case.

"Hon’ble Supreme Court in its Order of January 3, 2024, noted that SEBI had completed twenty–two out of twenty–four investigations into the Adani group. Subsequently, one more investigation was completed in March 2024, and one remaining investigation is close to completion. During the ongoing investigation in this matter, more than 100 summons, around 1,100 letters and emails have been issued to seek information. Further, more than 100 communications have been made seeking assistance from domestic/foreign regulators and external agencies."

"Also, more than 300 documents containing around 12,000 pages have been examined," SEBI said.

SEBI also responded to allegations that changes were made in the REIT regulations to favour Blackstone. Buch's husband Dhaval Puri works as an advisor for Blackstone. "Therefore, the claim that promoting REITs and SM REITs among various other asset classes by SEBI was only for benefitting one large multinational financial conglomerate is inappropriate," SEBI said.