SEBI Chair under fire from Congress for Conflict of Interest, linked to Rs 16.8 crore ICICI Bank Payments

In a press meeting on September 2, the Indian National Congress (INC) accused Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch of receiving a substantial salary from ICICI Bank while serving as a member of the regulatory body. The party has alleged a serious breach of ethics and accountability in public service.

During the conference, Indian National Congress spokesperson Pawan Khera claimed that Buch received Rs 16.8 crore from ICICI Bank between 2017 and 2024, which was 5.09 times more than her salary from SEBI during the same period, reportedly Rs 3.3 crore.

Khera questioned, "When she (SEBI Chairperson Madhabi Puri Buch) between 2017 and 2024 was taking regular income of Rs 16 crore 80 lakhs from ICICI Bank. You are also a full-time SEBI member. Why were you taking a salary from ICICI?"

"This is a direct violation of Section 54 of SEBI. Therefore, if Madhabi Puri Buch has any shame, she should resign from her post," he said.

The Congress party has raised concerns about multiple investigations involving ICICI Bank that were concluded while Buch was allegedly drawing income from the private entities, including ICICI Prudential.

ICICI Bank-ICICI Securities merger and Hindenburg allegations

The controversy surrounding Buch's alleged conflict of interest has also been fueled by SEBI's involvement in the merger between ICICI Bank Ltd and its subsidiary, ICICI Securities.

Further, the US-based short seller Hindenburg Research has recently accused Buch and her husband of making investments in obscure offshore funds, which it claimed were used in the "Adani money siphoning scandal." Hindenburg also alleged that SEBI may have circumvented its investigation into the Adani Group due to Buch's alleged conflict of interest.

Buch has dismissed the accusations as "character assassination" and emphasized that she has made all necessary disclosures and recusals to avoid any potential conflicts of interest.

Indian National Congress demands investigation through a Joint Parliamentary Committee

The Congress party has been vocal in its criticism of the alleged ties between the Adani Group and the ruling Bharatiya Janata Party (BJP). Khera has been outspoken on the matter, posting his concerns on social media and demanding a Joint Parliamentary Committee (JPC) investigation. The Opposition party's demand for a JPC investigation has gained momentum, setting the stage for further political confrontation.

What is the Adani-Hindenburg-SEBI saga?

The Adani-Hindenburg-SEBI saga has unfolded as a complex web of allegations and investigations, beginning with a scathing report from Hindenburg Research in January 2023. The report accused the Adani Group, led by Gautam Adani, of extensive stock manipulation and accounting fraud, claiming that the conglomerate had inflated its valuations through improper means.

This led to a dramatic sell-off of Adani stocks, resulting in a loss of over $150 billion in market value. In response to the allegations, the Supreme Court of India established a six-member expert committee to investigate potential regulatory failures by the Securities and Exchange Board of India (SEBI) in handling the situation. SEBI was tasked with examining whether the Adani Group violated public shareholding norms and engaged in undisclosed transactions.

As investigations progressed, Hindenburg released additional allegations in August 2024, claiming that SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had stakes in offshore funds linked to the alleged money siphoning scandal involving the Adani Group. Hindenburg suggested that Buch's potential conflict of interest may have influenced SEBI's investigation, leading to accusations of bias.

Buch and SEBI have categorically denied these allegations, with Buch describing them as "character assassination." She asserted that she had made all necessary disclosures to avoid conflicts of interest. However, the controversy intensified when it was revealed that Buch had received income from consultancy firms while serving as SEBI chair, raising further questions about her impartiality.

In June 2024, SEBI issued a show-cause notice to Hindenburg Research regarding its short-selling activities related to Adani stocks, prompting Hindenburg to claim that the notice was an attempt to intimidate those exposing corruption. Hindenburg maintained that its research was based on thorough due diligence and publicly available information.

The political fallout from this saga has been significant, with the Indian National Congress demanding a Joint Parliamentary Committee investigation into the matter. The opposition party has accused the government of failing to ensure accountability and transparency within regulatory institutions. As the investigations continue, the Adani-Hindenburg saga remains a focal point of scrutiny, with implications for corporate governance and regulatory oversight in India.