Hindenburg Research report on SEBI chief raises political storm, Rahul Gandhi demands JPC

Leader of the Opposition in the Lok Sabha Rahul Gandhi speaks via a video message posted on August 11, 2024.
| Photo Credit: PTI

Leader of Opposition in the Lok Sabha, Rahul Gandhi, on Sunday demanded a Joint Parliamentary Committee (JPC) inquiry into the charges against Securities and Exchange Board of India (SEBI) chief Madhabi Puri Buch in the latest Hindenburg report. The BJP dismissed the claims asserting that many global forces, with the help of the Congress “dynasty”, were attempting to hinder India’s progress.

Also Read : Hindenburg report echo: Adani group stocks tumble

Even as Ms. Buch and her husband have denied “the baseless allegations and insinuations made in the report”, Mr. Gandhi – in a videographed statement – termed the revelations against her “explosive”, wondering why she had not yet resigned. “New allegations have emerged, is the Supreme Court going to look at this matter suo motu again?” he asked.

The Adani Group has described the report as “a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Hon’ble Supreme Court in January 2024.”

The U.S.-based short seller on Saturday had said that the chief of India’s stock market regulator, in charge of probing allegations against the Adani group of companies, herself had a stake in offshore entities linked to what it claimed was “the Adani money siphoning scandal”.

Mr. Gandhi on Sunday said there was a significant risk in the Indian stock market as the governing institution was “compromised”. “A serious allegation against the Adani Group was illegal share ownership and price manipulation using offshore funds. It has now emerged that SEBI Chairperson Madhabi Buch and her husband had an interest in one of those funds… the savings of millions of Indians are at risk. It is, therefore, imperative that this matter is investigated,” he said.

He asked if something were to go wrong and investors were to lose their hard-earned money, who would be responsible? “Is the Prime Minister of India responsible? Is Madhabi Buch responsible, or is Mr. Adani responsible?… it’s slowing becoming crystal clear why PM [Narendra] Modi is against a JPC looking into this matter,” said Mr. Gandhi.

Earlier, Congress president Mallikarjun Kharge said the small and medium investors in the stock market needed to be protected, demanding a JPC inquiry. “Until then, concerns persist that PM Modi will continue to shield his ally, compromising India’s Constitutional institutions, painstakingly built over seven decades,” he said via a post on X.

All India Professionals’ Congress chairman Praveen Chakravarty said the controversy highlighted the need for technocrats and lateral entrants to responsible public positions to be ethically, legally, and optically above board. “Bodies such as the Economic Advisory Council to the Prime Minister also has several members that simultaneously hold private sector positions… the optics does not bode well even if all the members are capable individuals of the highest integrity…,” he said.

Communist Party of India (Marxist) leader Sitaram Yechury also sought a JPC probe, while D. Raja of the Communist Party of India accused the BJP of serving only corporate interests to the extent of protecting the “corrupt practices of their favoured corporates”.

MP Mahua Moitra of Trinamool Congress took to X to demand answers from the SEBI chief to several questions related to the new report. Talking to the media, Rashtriya Janata Dal’s MP Manoj Kumar Jha said the report showed how the system in the country was rigged and efforts were made to hide the “corruption”.

Samajwadi Party’s Akhilesh Yadav also demanded an investigation. 

However, terming the latest Hindenburg report a smoking gun, BJP leader and former Union Minister Rajeev Chandrasekhar said it was an attack on SEBI by a foreign entity, which was in “an obvious partnership” with the Congress and had an ominous motive and goal. He said the move was meant for destabilising and discrediting one of the world’s strongest financial systems and create chaos in the world’s fastest growing economy.

On X, Mr. Chandrasekhar said “its classic Cong style innuendo & lies glued together with a few grains of truth” and was aimed at discrediting the regulator, causing chaos and losses in the markets for investors, thus slowing down bullish sentiments.

“India’s financial sector has been rebuilt in last 10 years by @narendramodi — from the shattered, crony lending PSU banks and 10% NPA legacy of UPA, insider trading Ponzi frauds like Sahara scam, to a vibrant financial system that is supplying equity and credit to the world’s fastest growing economy i.e. India. Even as banks in US fail and stock markets collapse, Indian banks and markets continue to grow. I have said often and say again — many global forces with help of Cong dynasty want (to) slow down or trip up India’s rise. We won’t let them…,” said the BJP leader.