Why Sebi chief Madhabi Puri Buch's connection with Blackstone deserves more scrutiny

Hindenburg's report created significant controversy when it made allegations about the Adani Group last year, leading to a substantial drop in Adani's stock prices. On August 10, the US-based short-seller claimed that the Sebi failed to investigate these allegations due to conflicts of interest involving Sebi chairperson Madhabi Puri Buch and offshore funds related to Adani.

However, both the Adani Group and Buch have dismissed the allegations made by Hindenburg. But other questions could be answered about her association with other companies such as American private equity major Blackstone.

Buch became a whole-time member at Sebi in April 2017 and later became its chief in March 2022. If Buch thought the statements released by her and Sebi were enough to address the conflict of interest allegations levelled by the short-seller, she couldn’t be more wrong.

Buch stated that she had withdrawn from all Blackstone-related matters as Sebi chairperson. This is because Buch's husband Dhaval Buch has been a senior adviser at Blackstone since July 2019. However, her statement deserves more scrutiny because Blackstone is heavily invested in India.

“Blackstone is heavily invested in India. It is the promoter of many companies in India. That (Buch) has recused herself from Blackstone matters isn’t enough given the amount of investment they have in India," a veteran fund manager, requesting anonymity told The Morning Context. 

Though Buch said she has recused matters related to Blackstone, her statement doesn't mention the numerous companies that Blackstone, through its various subsidiaries, either owns' outright or holds a significant stake in. 

Such companies include Indiabulls Housing Finance (now Sammaan Capital), Aadhar Housing Finance, asset and wealth management firm ASK Investment Managers, hospital chain Care Hospitals and IT services provider Mphasis.

All these companies are part of the Blackstone group's USD 50 billion in assets in India, including USD 30 billion in real estate. Blackstone sits on top of a large network of listed companies regulated by Buch. For instance, Aadhar Housing Finance (backed by Blackstone) went public in May 2024, after SEBI cleared its draft red herring prospectus in February. The market regulator also cleared IPO of a company controlled by Rla Blackstone, during the leadership of Buch. Now the question is, has Buch recused herself from all matters involving companies that Blackstone has a stake in?