SEBI Chief Alleged to Have Consultancy Earnings During Tenure

SEBI chief Madhabi Puri Buch faces scrutiny over consultancy earnings during her tenure, raising questions about potential conflicts of interest and revealing deep regulatory failures. Will Government investigate?

SEBI Chief’s Consultancy Earnings Raise Conflict of Interest Concerns

Madhabi Puri Buch, the head of India’s Securities and Exchange Board of India (SEBI), is under scrutiny for allegedly continuing to earn revenue from a consultancy firm during her seven-year tenure at the regulatory body. According to public documents reviewed by Reuters, this could potentially violate regulatory rules that prohibit officials from engaging in profit-making activities while in office. This allegation not only taints her position but also raises serious questions about the government’s commitment to transparency and integrity.

Allegations Linked to Adani Group Investigations

Buch has been involved in investigations surrounding the Adani Group, a conglomerate led by Gautam Adani. The allegations against the group, initially brought to light by Hindenburg Research in January last year, caused a significant drop in the stock prices of Adani Enterprises and other affiliated companies. While the stock prices later recovered, the investigation by SEBI is ongoing. Hindenburg Research has also raised concerns about a possible conflict of interest in Buch’s role due to her prior investments.

Consultancy Firm’s Earnings During Buch’s Tenure

Public records reveal that Agora Advisory Pvt Ltd, a consultancy firm in which Buch holds a 99% stake, earned a revenue of 37.1 million rupees ($442,025) during her tenure. This revelation has raised questions about whether Buch’s continued earnings from the firm breach SEBI’s 2008 policy, which prohibits officials from holding any office of profit or receiving compensation from other professional activities.

In her defense, Buch stated on August 11 that the consultancy firms were disclosed to SEBI, and that her husband took over the consulting business after retiring from Unilever in 2019. Despite this, concerns remain about the potential conflict of interest, especially since Hindenburg’s latest report claims Buch transferred her shares in Singapore-based Agora Partners to her husband in March 2022. However, records indicate that she still holds shares in the Indian consulting firm as of the financial year ending March 2024.

Calls for Resignation Amidst Regulatory Breach Allegations

Subhash Chandra Garg, a former senior official in the Indian government and a SEBI board member during Buch’s tenure, described her continued ownership of the firm as a “very serious” breach of conduct. He argued that there was no justification for Buch to retain ownership of the firm after joining SEBI and that her position at the regulator is now “untenable.”

Hindenburg’s allegations have led to calls for Buch’s resignation, with opposition leaders joining the chorus. Meanwhile, a spokesperson for the ruling Bharatiya Janata Party (BJP) dismissed the allegations as baseless.

Garg and another SEBI board member have stated that no disclosures regarding Buch’s business interests were presented to the board for scrutiny. While annual disclosures are required, it remains unclear whether Buch made these disclosures to Ajay Tyagi, the SEBI chairperson at the time.