Hindenburg vs SEBI chief: Madhabi Buch's consulting firm shares address with its auditor, says report

A consultancy set up by Madhabi Buch before she became the Securities and Exchange Board of India (SEBI) chairperson is registered at the same address as its statutory auditor, reports said, raising fresh doubts about the past practices of the chief of India's market regulator.The firm came under scrutiny after the recent report by US-based short seller Hindenburghighlighted it as part of possible conflicts of interest on the part of Buch.

The shared address issuewas reported by Scroll website earlier this week citing the consulting firm's regulatory filings. The Scroll report, published on August 13, said the firm was identified asAgora Advisory Private Limited.

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The Hindenburg report had alleged thatBuch previously held investments in offshore funds also used by the Adani Group. The report said thatBuch and her husband held stakes in an offshore fund where a substantial amount of money was invested by associates of Vinod Adani, brother of Adani Group Chairman Gautam Adani.

Both the Buchs and the Adani group denied the allegations.

A look at the consulting firm

Citing documents with the Registrar of Companies, the Scroll report on Tuesday said thatAgora Advisory Private Limited was incorporated on May 7, 2013, with Madhabi Buch as one of its two directors.

Buch at that pointwas based in Singapore. She also registered another firmAgora Partners Pte Ltd, in Singapore.

Agora Advisory Private Limited is located at201, RNJ Corporate, Next to Samrat Hotel, Jawahar Road, Ghatkopar (East), Mumbai. This address was cited in the firm's latest balance sheets for the year 2023-24.

Scroll reported that these balance sheets wereaudited by a chartered accountancy firm called Shah and Savla LLP.

But here's the catch: Shah and Savla LLP's address is the same as that ofAgora Advisory Private Limited.

The report pointed out that two other firms operated by Buch - Aarnaira Impact Solutions Private Limited and Aarnaira Development Foundation - also have the same address.

She had stepped down from these firms before joining SEBI in 2017. Her husband Dhaval has beena director in these firms since 2019.

Experts told the publication that a firm and its auditor sharing the same address was a “shady”and a “lazy” practice usually restricted to medium, small and micro enterprises in the informal sector.

An expert, who chose to remain anonymous, said this wasusually a sign of bad corporate governance.

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Another expert highlighted thatan auditor sharing its address with the auditee firm might not necessarily be a red flag, but could lead to questions about other links.

Is Agora Advisory dormant or active?

Apart from the controversy over Buch's firm and its auditor sharing the same address, Scroll reported citing documents that Madhabi Buchcontinued to hold a 99 per centstake in Agora Advisory Private Limited till as late as March this year, despite resigning from the consulting firm in 2017.

The firm has said that it is engaged inmanagement consultancy services.

Hindenburg had highlighted that the firmreported revenue of Rs 1.98 crore (around $236,063)in 2021-’22, more than four times Buch’s salary as the SEBI chief.

(With inputs from agencies)