Centre, opposition trade barbs to call SEBI chief before the Public Accounts Committee: Report
Published: Sep 11, 2024, 04:13 IST | Updated: Sep 11, 2024, 04:13 IST
The chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch
According to a recent report, the Centre and Opposition debated the necessity of summoning the Securities and Exchange Board of India (SEBI) Chief, to testify before the Public Accounts Committee (PAC) of the parliament, highlighting investor distrust in regulatory bodies as detailed by The Economic Times.
Public Accounts Committee: Definition, history, and role
The Public Accounts Committee (PAC) is a committee of selected members of parliament, constituted by the Parliament of India, for the purpose of auditing the revenue and expenditure of the Government of India. They check that parliament's exercises over the executive stem from the basic principle that parliament embodies the will of the people. This committee along with the Estimates Committee (EC) and Committee on Public Undertakings (COPU) are the three financial standing committees of the Parliament of India.
It serves as a check on the government especially with respect to its expenditure bill and its primary function is to examine the audit report of Comptroller and Auditor General (C&AG) after it is laid in the Parliament. C&AG assists the committee during the course of the investigation.
It is to be noted that none of its members are allowed to be ministers in the government. The main function of the committee is to ascertain whether the money granted by parliament has been spent by government within the scope of the demand.
What is the dispute related to?
According to the report by The Economic Times, in a heated debate in meeting convened to to discuss the performance audit of Jal Jeevan Mission, the Centre and the Opposition clashed over whether the Chief of the Securities and Exchange Board of India (SEBI) should be called to testify before the Public Accounts Committee (PAC).
The Opposition argued that bringing in the SEBI chief was crucial for accountability, especially in light of recent controversies surrounding market regulations. Government officials countered, stating that it was unnecessary and could undermine regulatory independence.
TMC Sougata Roy demanded that Buch should depose before the PAC to discuss the functioning of SEBI. Whereas, BJP leader Nishikant Dubey, strongly objected to the demand saying it was against rules, the sources said.
As the discussions unfold, the spotlight remains on the role of SEBI and its leadership in navigating the complexities of market regulations and investor trust. It is to be seen how the government, SEBI chief and other authorities navigate this difficult time when due to the Hindenburg saga the integrity of the market regulator is in question. The main opposition party the Indian National Congress has already held several press meets to highlight the need for a Joint Parliamentary Committee (JPC) into the Adani issue.
A dispute arose in parliament's Public Accounts Committee over calling SEBI Chairperson Madhabi Puri Buch to discuss SEBI's functioning. TMC's Sougata Roy demanded her presence, while BJP's Nishikant Dubey opposed, citing procedural rules. The issue stems from Hindenburg Research's allegations against Buch, which she has denied.
Dhaval Buch hired for his expertise: M&M, Dr. Reddy's and Pidilite on Cong allegations
According to a PTI report, Mahindra & Mahindra, Dr. Reddy's Laboratories, and Pidilite Industries on Tuesday said they had hired the services of Dhaval Buch for his expertise after the Congress accused his wife and SEBI Chairperson Madhabi Puri Buch of conflict of interest.
The Congress on Tuesday claimed that Sebi Chairperson Buch had a 99 per cent stake in a firm when it provided consultancy services to the Mahindra and Mahindra Group and her husband received Rs 4.78 crore as income from the conglomerate while she was adjudicating cases of the same group. Congress general secretary in-charge communications Jairam Ramesh asked whether Prime Minister Narendra Modi was aware that Buch owns 99 per cent of Agora Advisory Pvt Ltd and is receiving significant fees from listed entities.
The list of companies that availed consultancy service from Agora Advisory Pvt Ltd -- Mahindra and Mahindra Ltd, Dr. Reddy's, Pidilite, ICICI, Sembcorp and Visu Leasing and Finance, the Congress said. In a regulatory filing, Mahindra & Mahindra Ltd refuted allegations of conflict of interest on payments made to Dhaval Buch, describing the charges as "false and misleading in nature".
The company said Dhaval Buch joined Mahindra Group almost three years before Madhabi Buch was appointed the Sebi chairperson. "Compensation has been specifically and only for Mr Buch's supply chain expertise and management acumen, based on his global experience at Unilever," the company asserted.
Referring to the Congress' allegations on approvals by SEBI to the company, it said, "None of the five SEBI orders or approvals referenced in the allegations are relevant." Three of the five approvals or orders of SEBI do not pertain to the company or any of its subsidiaries, it said. Responding to the allegations, Dr. Reddy's Laboratories said it engaged Dhaval Buch of Agora Advisory Pvt Ltd for leadership coaching for a total remuneration of Rs 6.58 lakh for a limited period from October 2020 to April 2021.
"We routinely engage external coaches to enable significant role transitions of our leaders. Mr. Dhaval Buch's work in India and globally for Unilever was well-suited to coach the identified leader in our Company, and the remuneration paid to Mr. Buch was in line with that of other coaches," Dr. Reddy's said.
The assignment started and ended well before Madhabi Buch's term as SEBI Chairperson, it said, adding, "any suggestion that the Company was treated differently by SEBI as a result of this would be baseless and malafide. The company has and continues to operate in compliance with all applicable laws." Pidilite Industries, too, clarified that the company engages with multiple partners and consultants who are renowned professionals in their respective fields.
"New allegations have emerged that the private consulting entity, 99% owned by SEBI Chair Madhabi Buch, accepted payments from multiple listed companies regulated by SEBI during her time as SEBI Whole-Time Member. The companies include: Mahindra & Mahindra, ICICI Bank, Dr. Reddy’s and Pidilite. These allegations apply to Buch's Indian consulting entity with no details thus far on Buch's Singapore-based consulting entity.Buch has maintained her complete silence for weeks on all of the emerging issues." It is now to be seen how the SEBI chief responds to the most recent claims by Hindenburg Research.