New Delhi, India

Union Finance Minister Nirmala Sitaraman has received a letter from former ministry official, EAS Sarma, urging her to push for a judicial investigation into the allegations made by US-based short-seller, Hindenburg Research, in its latest report against SEBI chief Madhabi Puri Buch. 

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Sarma said Madhabi's 'conflict of interest' with Adani Group forced the Indian market regulator to conduct an impartial probe into the previous allegations made by Hindenburg.  

"If the accusations made by Hindenburg are factually found to be correct, all investigations conducted during the last few years by the stock market regulator on external manipulation of stock market indices by a few corporate entities through their benami agencies need to be subject to a re-investigation," said Sarma in the letter, as per news agency PTI.

The career bureaucrat added that the government should request the Chief Justice of India (CJI) to nominate a senior member to head an inquiry commission that may probe the case to uphold the public trust in the regulatory body.

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"Such accusations should wake up the powers that be to refrain from interfering with the independence of any statutory institution for that matter, as such interference will erode public trust and credibility of that institution," he added. 

Prior to Sarma, Leader of Opposition (LoP) in Lok Sabha (Lower House of Indian Parliament) and Indian National Congress (INC) leader, Rahul Gandhi, had also demanded a Joint Parliamentary Committee (JPC) inquiry into the charges. 

Watch | Hindenburg vs SEBI Chief Saga: Hindenburg allegations invoke Chandra Kochar's case

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Opposition demands JPC probe

Gandhi asked the government if something were to go wrong and investors were to lose their hard-earned money, "who would be held responsible?" 

“Is the Prime Minister of India responsible? Is Madhabi Buch responsible, or is Mr Adani responsible? It’s slowly becoming crystal clear why PM [Narendra] Modi is against a JPC looking into this matter,” said Gandhi. 

Also read | Who'll watch the watchdog? Did SEBI chief Madhabi Buch fail to disclose Adani links, recuse from probes?

Meanwhile, global investors have also urged Madhabi to resign from the top post to maintain the sanctity of the watchdog. 

"Some people associated with SEBI have a conflict of interest. We have to assume that these allegations are true. If they are true then the people involved have to resign, there is no question about this," Mark Faber, the publisher of ‘The Gloom, Boom & Doom Report’ told WION.

Economist and tech analyst Daniel Geltrude also suggested that Madhabi should resign, warning that corruption involving offshore funds can erode foreign inflows.

(With inputs from agencies)