SEBI chief Madhabi Puri Buch oversaw Adani probe despite conflict of interest, claims board member

Securities and Exchange Board of India (SEBI) chairperson, Madhabi Puri Buch, did not recuse herself from the investigation launched into the alleged stock manipulation carried out by the Adani Group, a board member has revealed, according to a report in Scroll.

The Indian market regulator chair has been under scrutiny ever since US-based short seller Hindenburg Research released a report earlier this month, alleging thatBuch had a serious conflict of interest throughout the investigation process due to her investments abroad.

The member, speaking on condition of anonymity to the publication stated that Buch oversawSEBI’s Adani probe “because it was ordered by the Supreme Court”.

The member said the probe was discussed with her informally too and at no point, Buch offered to recuse herself from these discussions.

If Buch did indeed oversee the investigation, it contradicts the position taken by the market regulator when it released a statement stating thatBuch had “recused herself in matters involving potential conflicts of interest”.

The board member added that "nobody in SEBI knew about" Buch's rather clandestine investments abroad which came as a surprise.

Watch |SEBI chief vs Hindenburg: Hindenburg links SEBI Chief to Adani report

What did Hindenburg report claim?

Hindenburg alleged that Buch invested her money in an obscure Bermuda/Mauritius fund alongside money allegedly siphoned by Vinod Adani - brother of Gautam Adani, who is chairman of Adani Group.

"SEBI was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms Buch was personally invested in and funds by the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest," Hindenburg added.

Weeks before Buch's appointment to SEBI, her husband, Dhaval Buch, requested to transfer their investments into his sole control to avoid any scrutiny that may come with the high-profile regulatory job, the report said.

Notably, a2008 code directs members to disclose their interests at board meetings if it can lead to potential conflict.

“A member, who is directly or indirectly interested in any matter coming up for consideration at a meeting of the Board, shall disclose the nature of his interest at such meeting."

It has been over 20 days since the Hindenburg report came out by the central government has maintained a stoic silence on the issue.

(With inputs from agencies)