Hindenburg vs Sebi Chief: Mauritius banking regulator issues clarification
The Financial Services Commission (FSC) of Mauritius has issued a clarification in response to recent allegations made by Hindenburg Research.
The report targeted Sebi Chairperson Madhabi Puri Buch and suggested various issues concerning Mauritius’s financial system. The FSC has provided detailed information to address these claims.
In its statement, the FSC refuted the allegations that Mauritius is a “tax haven” and clarified that the fund named “IPE Plus,” mentioned in the Hindenburg report, is not associated with the FSC and is not based in Mauritius.
“The Financial Services Commission, Mauritius (“FSC”) has taken cognisance of the contents of the report published by Hindenburg Research on 10 August 2024 wherein mention has been made of ‘Mauritius-based shell entities’ and Mauritius as a ‘tax haven’. The FSC wishes to highlight that the legislative framework in Mauritius does not permit creation of shell companies,” said the statement.
According to the FSC, the IPE Plus fund is neither licenced by the FSC nor domiciled in Mauritius.
Mauritius’s FSC, which oversees non-banking financial services and global business in the country, highlighted the strength of its regulatory framework.
The FSC’s statement highlighted that Mauritius has a robust system for global business companies, complying with international standards.
The statement mentioned that all global business companies licensed by the FSC must meet ongoing substance requirements set out in the Financial Services Act. The FSC monitors compliance closely to ensure adherence to global best practices. Mauritius’s compliance with the standards of the Organisation for Economic Co-operation and Development (OECD) was also noted.
The Hindenburg report had suggested a complicated investment structure involving a company controlled by Vinod Adani, which purportedly invested in the “Global Dynamic Opportunities Fund” in Bermuda.
This fund was said to have invested in the “IPE Plus Fund 1,” allegedly registered in Mauritius. The report also claimed that Sebi Chairperson Madhabi Buch and her husband, Dhaval Buch, had hidden interests in these offshore funds.
“IPE Plus Fund and IPE Plus Fund 1 are not licensees of the FSC and are not domiciled in Mauritius,” read the statement.
In response to these allegations, Madhabi Puri Buch and her husband issued a joint statement clarifying that the investment in question occurred in 2015, prior to Madhabi Buch’s appointment to Sebi. At that time, they were private citizens living in Singapore.
Additionally, Morgan Stanley Capital International (MSCI) announced that it would lift the freeze on Adani Group stocks.
This decision follows the scrutiny triggered by the Hindenburg allegations. Starting with the August 2024 Index Review, MSCI will update the Number of Shares (NOS), Foreign Inclusion Factor (FIF), and Domestic Inclusion Factor (DIF) for Adani Group and related securities.