In a recent development in the ongoing Adani-Hindenburg controversy, the Financial Services Commission (FSC) of Mauritius has issued a statement firmly rebutting claims made by Hindenburg Research. The statement addresses allegations regarding a Mauritius-based offshore fund allegedly linked to a conflict of interest involving the Securities and Exchange Board of India (SEBI) chief, Madhabi Puri Buch.
On August 10, 2024, Hindenburg Research published a report that included serious allegations against Buch and her husband. The report claimed that they had invested an undisclosed sum in a Mauritius-registered fund, which was, according to Hindenburg, part of a scheme involving an Adani director and associates to inflate stock prices and facilitate fund round-tripping. The Hindenburg report described the Mauritius-based entities involved as “shell companies” and referred to Mauritius as a “tax haven.”
In response, the FSC Mauritius has strongly refuted these claims. According to the FSC, the funds mentioned in the Hindenburg report, specifically ‘IPE Plus Fund’ and ‘IPE Plus Fund 1,’ are not registered or domiciled in Mauritius. The FSC clarified that these funds are not licensed by the commission and, therefore, do not fall under its jurisdiction. This direct refutation aims to counter the insinuation that Mauritius is implicated in the alleged financial misconduct.
The FSC further emphasized that Mauritius does not permit the creation of shell companies. “Mauritius has a robust legislative framework governing global business companies. All such companies licensed by the FSC must meet stringent substance requirements as stipulated in Section 71 of the Financial Services Act. These requirements are strictly monitored by the FSC to ensure compliance,” the commission stated.
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Moreover, the FSC highlighted that Mauritius adheres to international best practices in financial regulation and has been rated as compliant with the standards set by the Organisation for Economic Co-operation and Development (OECD). According to the FSC, Mauritius has been positively reviewed by the OECD Forum on Harmful Tax Practices, which confirmed that the island nation does not have any harmful features in its tax regimes. This recognition, the FSC argues, affirms Mauritius’s standing as a well-regulated, transparent, and compliant jurisdiction, thus dispelling the notion of it being a “tax haven.”
The Financial Services Commission’s response aims to address concerns and clear Mauritius’s name amidst the swirling controversy. By reiterating its regulatory standards and adherence to international norms, the FSC seeks to reinforce the credibility of Mauritius’s financial services sector and counteract the negative portrayal suggested by the Hindenburg report.
As the dispute continues to unfold, the FSC’s statement serves as a crucial counter-narrative to the allegations presented by Hindenburg Research. It underscores Mauritius’s commitment to maintaining high standards of financial integrity and regulatory compliance, while also challenging the claims that have raised questions about the island nation’s role in the ongoing investigation.
The broader implications of the controversy remain significant, with ongoing scrutiny of both the allegations made by Hindenburg and the responses from various regulatory bodies. As the situation develops, stakeholders and observers will be keenly watching how these claims and counterclaims impact the individuals and institutions involved, as well as the reputation of Mauritius as a financial hub.
