Hindenburg report: Government unlikely to wade into row, officials say report 'malicious'

NEW DELHI: Government is unlikely to immediately step into the controversy created by the Hindenburg report as senior officials believe that the charges against Sebi chief Madhabi Puri Buch and her husband Dhaval, are "untrue and malicious" and are in response to the regulator's notice to the short seller.

They alleged that Hindenburg may also be trying to make a quick buck from the Indian markets through its latest action and the regulator and govt are keeping a close tab on how the developments unfold.

Describing it as a fresh attempt to "create a smokescreen", a govt source suggested that this may be part of a larger attempt to discredit the regulator at a time when the Indian stock market is seeing a good run on the back of healthy macroeconomic fundamentals and strong growth prospects with clean corporate and bank balance sheets. The source alleged such actions were part of a pattern to hit Indian markets but argued that the markets were now strong and deep enough to withstand Hindenburg-type attacks.

"There have been a series of regulatory actions to improve the overall functioning of the markets and the regulator itself has not shied away from cautioning investors, wherever it sees pressure building up," another official said, while listing out a host of measures taken by Sebi. The officer said that Sebi has submitted its probe findings on issues raised by Hindenburg in its earlier report to the Supreme Court.

Pointing to the statements issued by Madhabi Puri Buch and Dhaval Buch, who both worked in the private sector, officials said required disclosures had been made, which may not be in public domain like those of civil servants.



While suggesting that some of Puri Buch's actions may have upset some of the market participants, sources said, the regulator has followed an elaborate consultation paper, even in the case of REITs, amid suggestions by Hindenburg that the rules benefited Blackstone, where Dhaval is an adviser.

Market players are closely monitoring govt's response, given that Puri Buch has over six months to go as Sebi chief and is eligible for another term. She took over as Sebi chief in March 2022 and was given a three-year term.

Stay updated with the latest news on Times of India. Don't miss daily games like Crossword, Sudoku, and Mini Crossword.