In this new report, Hindenburg Research has highlighted the links between SEBI Chairperson Madhabi Puri Buch and the rapidly growing real estate investment trust (REIT) industry in India.
Thus, the Hindenburg report reveals that Buch’s husband was hired as a “Senior Advisor” at Blackstone in 2019 despite having no background in the fund, real estate, or capital markets.
Notably, Blackstone is among the largest investors and sponsors of REITs, India’s still emerging but fast-growing asset class. When Dhaval Buch joined BLACKSTONE as an advisor in 2019, the report alleges that SEBI had ceased to regulate and brought new regulations/consultations to protect REIT sponsors like BLACKSTONE.
At the same time, current SEBI Chief Madhabi Buch has publicly endorsed REITs as the ‘Favorite Product for Future’, advising investors to view the asset class as ‘positive’ without revealing her husband’s business ties with a significant REIT sponsor.
The report also elaborates that Blackstone, during this period, completely exited the Embassy REIT, India’s first listed realty company, through a record ₹71 billion block deal.
The market regulator has been accused of some level of cover-up and /or collusion with entities involved if the allegations leveled by Hindenburg on the Adani group are well grounded and given credence.
REIT 101
REITs are investment structures that hold and manage portfolios of income-earning real estate. Most of them specialize in commercial property, such as offices. They help small investors invest in commercial real estate by way of tradable units.
After the listing of India’s first REIT by the Blackstone sponsored Embassy in 2019, the segment is gaining momentum, and Blackstone is the sponsor of yet another two REITs, namely Mindspace and Nexus Select Trust.
The Hindenburg report has now revealed the Sebi chief’s alleged links with REITs, and the matter could lead to a broader discussion on regulatory supervision and rules regarding disclosure.
