Hindenburg report: Rahul Gandhi says SEBI integrity ‘gravely compromised’, demands accountability from PM Modi

The recent allegations by Hindenburg Research against SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, have ignited a political storm, with opposition parties demanding a Joint Parliamentary Committee (JPC) to investigate the matter. Now Leader of Opposition in Lok Sabha, Rahul Gandhi has commented that the integrity of SEBI "has been gravely compromised". 

Rahul Gandhi slams PM Modi

"The integrity of SEBI, the securities regulator entrusted with safeguarding the wealth of small retail investors, has been gravely compromised by the allegations against its chairperson," alleged the Rae Bareli MP.

Slamming Indian Prime Minister Narendra Modi, Gandhi said, "It is now abundantly clear why Prime Minister Modi is so afraid of a JPC probe and what it might reveal."

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Addressing the Indian public, Gandhi asked them to imagine "an international cricket match between India and Australia, and every single person who is watching the match and those playing the match know that the umpire is compromised."

"What would happen to the match? What would happen to the fairness of the match and the outcome? How would you feel as somebody who is participating in the match? This is exactly what is happening in the Indian stock market," he said in the video message.

Gandhi said that honest investors across India have pressing questions for the Modi government. 

"Why hasn't SEBI Chairperson Madhabi Puri Buch resigned yet?" asked Gandhi. 

"If investors lose their hard-earned money, who will be held accountable—PM Modi, the SEBI Chairperson, or Gautam Adani?"

Watch what he said here:

He also questioned whether India's top court will look into the "very serious allegation".

"In light of the new and very serious allegations that have surfaced, will the Supreme Court look into this matter suo moto once again?"

'Colonial arrogance of days bygone'

Senior advocate Mahesh Jethmalani has dismissed the Hindenburg allegations as a "pathetic damp squib".

"The announcement prior to its alleged big revelation itself reveals its motive: to destabilise India’s stock markets," alleged the former Rajya Sabha MP from the Bhartiya Janata Party.

"This reeks of colonial arrogance of days bygone and contempt by a rich country national fortified by safe harbour, of the economic sovereignty of an emerging nation," he added.

Also read | 'For a discredited short-seller...': Adani Group hits back over Hindenburg report

Hindenburg research allegations

On Saturday, US short seller Hindenburg alleged SEBI chairperson Madhabi Buch was in cahoots with Adani.

"We had previously noted Adani's total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani’s relationship with SEBI Chairperson, Madhabi Buch."

"What we hadn't realised: the current SEBI Chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani," said the US firm.

It said that its allegations were based on documents provided by a whistleblower and investigations carried out by other entities.

SEBI urges calm, points to ‘short positions’ disclaimer in report

India’s market regulator SEBI has meanwhile issued a statement on Sunday and urged investors to remain calm and conduct due diligence before reacting to the Hindenburg Research report, pointing out that it includes a disclaimer that the short-seller may hold short positions in the securities covered.

“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,” the statement read.

(With inputs from agencies)