Sebi Refutes Hindenburg Claims on REIT Rules

The Securities and Exchange Board of India (Sebi) has firmly rebutted allegations made by Hindenburg Research concerning recent changes to Real Estate Investment Trust (REIT) regulations. The US-based short-seller claimed that these regulatory modifications were designed to benefit Blackstone, a multinational financial conglomerate where Sebi Chairperson Madhabi Buch‘s husband, Dhaval Buch, is employed.

In a comprehensive statement issued on Sunday, Sebi emphasized that all amendments to the REIT rules were implemented following a thorough and transparent consultation process. The market regulator labeled the accusations from Hindenburg Research as “inappropriate,” asserting that such changes are carried out with the utmost transparency.

Hindenburg Research had alleged that during Madhabi Buch’s tenure as a whole-time member of Sebi, Dhaval Buch was appointed as a senior advisor to Blackstone despite lacking experience in real estate or capital markets. The firm further alleged that subsequent to this appointment, Sebi facilitated significant changes to REIT regulations that ostensibly favored Blackstone.

Sebi countered these claims by stating, “At no time has Dhaval been associated with the real estate side of Blackstone.” Furthermore, Sebi clarified that the REIT Regulations, 2014, have been periodically updated, with extensive industry consultation preceding any regulatory changes.

The regulator emphasized that every proposed regulatory change undergoes a rigorous consultation process involving industry stakeholders, investors, intermediaries, and the public. These proposals are then reviewed and approved by the SEBI Board before being officially notified. For added transparency, Sebi publishes agenda papers and outcomes of Board meetings on its website.

Sebi also rejected allegations that it had unduly favored Blackstone or promoted REIT firms to benefit one large multinational conglomerate. The regulator pointed out its ongoing efforts to highlight the potential of REITs in enhancing the Indian securities market, as outlined in Sebi’s annual report.

Additionally, Sebi assured that it has stringent internal mechanisms to handle conflicts of interest, including disclosure requirements and recusal procedures. Madhabi Buch and Dhaval Buch confirmed that Blackstone was added to her “recusal list” at Sebi immediately following Dhaval’s appointment.

Hindenburg Research’s accusations come amid broader allegations of stock manipulation and financial misconduct against the Adani Group, which the Sebi Chief, the Adani Group, and the offshore fund manager have all denied as baseless.

Aakhir Tak Editor-in-Chief

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