Hindenburg Saga: SEBI Chief Madhabi Puri-Buch’s Blackstone Connection Raises New Questions
SEBI Chief: Madhabi Puri-Buch, the Chairperson of the Securities and Exchange Board of India (SEBI), is facing intense scrutiny following revelations about her connections with Blackstone Inc. Hindenburg Research’s latest report has brought to light potential conflicts of interest linked to Puri-Buch’s promotion of Real Estate Investment Trusts (REITs) in India while her husband, Dhaval Buch, serves as an adviser to Blackstone, a major sponsor of two out of four listed REITs. This article examines the emerging issues surrounding Puri-Buch’s connections with Blackstone and other businesses, and the implications for SEBI’s regulatory role.
Puri-Buch and Blackstone: The Controversial Connection
Madhabi Puri-Buch has been a proponent of REITs, advocating for them as a promising asset class within India’s investment landscape. However, this endorsement comes under a cloud due to her husband’s role at Blackstone, which has significant investments in REITs. The connection raises questions about potential conflicts of interest, particularly because Blackstone’s involvement in Indian markets is substantial, encompassing major investments in sectors like healthcare, IT, and finance.
Despite Puri-Buch’s public denials of any conflict of interest, including statements about her recusal from Blackstone-related matters, concerns persist. Blackstone’s significant stake in Indian companies like Care Hospitals, Mphasis, Aadhar Housing Finance, and Indiabulls Housing Finance complicates the situation. Critics argue that Puri-Buch’s recusal from Blackstone affairs may not be sufficient to address all potential conflicts.
Unanswered Questions and Allegations
The Morning Context has highlighted ongoing concerns about Puri-Buch’s connections with Blackstone and other entities. The SEBI Chairperson has been accused of failing to disclose all relevant connections, particularly in light of Hindenburg Research’s claims about her ownership in offshore funds allegedly tied to the Adani Group’s financial scandal. Although Puri-Buch has asserted her withdrawal from Blackstone-related matters, the lack of transparency about which Blackstone-affiliated companies she has recused herself from remains a significant issue.
Moreover, SEBI’s decision under Puri-Buch to approve the initial public offering (IPO) of Aadhar Housing Finance—a company controlled by Blackstone—adds another layer to the controversy. The approval process and any potential influence exerted by Puri-Buch’s connections with Blackstone are now under examination.
The Broader Impact: Regulatory Implications
The scrutiny surrounding Puri-Buch’s role underscores broader concerns about the independence and effectiveness of financial regulators. The allegations have sparked debates about the ability of SEBI to enforce regulations impartially when its chairperson has close ties to major financial players. The situation highlights the challenges regulators face in maintaining public trust while navigating complex relationships with influential firms.
The revelation that Dhaval Buch, Puri-Buch’s husband, became a senior adviser at Blackstone in July 2019, adds further complexity. In April 2019, the Ashok Goel Trust, associated with Atul Goel—a member of Blackstone’s leadership advisory board—acquired a 51% stake in Blackstone’s interest in Essel Propack Ltd (now EPL Ltd). This link to an insider trading case resolved by Puri-Buch raises additional questions about her role and the integrity of SEBI’s regulatory actions.
Conclusion: The Path Forward
The ongoing controversy surrounding Madhabi Puri-Buch and her connection with Blackstone highlights critical issues related to conflicts of interest and regulatory transparency. As SEBI navigates these challenges, it is crucial for the regulator to address public concerns openly and ensure that all potential conflicts are managed effectively.
For SEBI to maintain its credibility and uphold market integrity, it must demonstrate a commitment to unbiased oversight and clear disclosure practices. The outcome of this scrutiny will likely have significant implications for the future of financial regulation in India and the broader discourse on regulatory independence and accountability.
