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Informist, Wednesday, May 28, 2025

 

--Lokpal:Buch 2017 disclosed stake in Agora Advisory, Agora Partners to SEBI 

--Lokpal:No wrongdoing by Ex SEBI Chief Buch in consulting cos case

 

NEW DELHI – The Lokpal of India Wednesday gave a clean chit to former Securities and Exchange Board of India chairman Madhabi Puri Buch on allegation of conflict of interest and gaining undue advantage, which was based on a Hindenburg Research report. Lokpal said that the allegations in the complaints against Buch were based more on "presumptions and assumptions and not supported by any verifiable material".

 

The complaints were essentially founded on the Hindenburg Report dated Aug. 10, 2024, by a known short seller trader whose focus was to expose or corner Adani Group of Companies, said Lokpal. That report by itself cannot be made the sole basis to escalate action against Buch, Lokpal added.

 

The complainants, which included Trinamool Congress Member of Parliament Mahua Moitra, had said that Buch and her husband invested substantial amount in a fund linked to investments in Adani Group of companies under scrutiny before SEBI for stock price manipulations. The complainants alleged failure on part of Buch to disclose the investments in obscure funds to the Board of SEBI and Supreme Court appointed expert committee to probe Adani case.

 

Lokpal said that Buch and her husband were not in control of the decision of the fund to make investments. They were only passive investors in the fund, which they had already redeemed in 2018, said Lokpal. Further, Buch was not concerned with any of the investigations and actions by SEBI against Adani Group in any official capacity. "...we hold that the allegation that the RPS (Buch) intentionally provided heavily redacted documents to the expert committee of the Honorable Supreme Court is devoid of merit, truly a veiled attempt to reopen and question the findings of the Supreme Court," said Lokpal.  

 

These complaints are chiefly based on a report authored by Hindenburg Research, whose credibility has already been seriously doubted by the Supreme Court in respect to its report dated Jan. 24, 2023, said Lokpal. "In conclusion, it is noticed that the RPS (Buch) had neither directly or indirectly invested in Adani Group or had occasion to deal with or be associated with the investigations against Adani Group by SEBI in any capacity; and had made necessary disclosures to SEBI as well as the Supreme Court appointed committee," said Lokpal.

 

Further, allegations were made about the money received from M&M Group and by Agora Advisories Pvt. Ltd. in the guise of providing consultancy services by the husband of Buch. This, according to the complainants, was not a legitimate consideration for any consultancy work but by way of quid pro quo to facilitate resolution of matters of M&M Group companies investigated by SEBI. The consultancy services were ostensibly provided by Agora Advisories, a company in which Buch had 99% of shareholding. According to the Lokpal's order, Buch argued that the fact of her shareholding in both the companies was disclosed by her to SEBI when she joined as a whole time member in 2017 itself. "...it is evident that there was absolutely no wrongdoing by the RPS (Buch) or her husband in respect of the two consulting companies (Agora Advisories and  Agora Partners," argued Buch in Lokpal.

 

Out of the five cases mentioned by the complainant, three did not pertain to M&M Group at all, said Lokpal. One case was regarding the rights issue of Mahindra & Mahindra Financial Services Ltd., which did not require any approval of SEBI, said Lokpal. In other words, no due diligence has been done by the complainants before making such reckless and unfounded allegations against Buch, said Lokpal. Another case mentioned by the complainant pertained to an exemption application for the M&M Group under the SEBI (Substantial Acquisition of Shares Takeover) Regulations 2011. This matter was disposed of a year before Buch's husband took up the consultancy assignment of M&M Group from April 2019 onwards, said Lokpal.

 

The complainant also alleged that Buch had made a pretence of recusal from matters of M&M and Blackstone Inc., but nothing prevented her from influencing the other wholetime members and of the Board of SEBI for a favourable outcome. "The allegations against the named RPS (Buch) regarding quid pro quo and of influencing other officials of SEBI to give undue advantage to private entities such as M&M Group and Blackstone are ex-facie figment of imagination of the Complainant(s) and indeed, speculative claim without any credible material in support thereof," said Lokpal.

 

Further, Lokpal dismissed the allegation that Buch gained undue advantage by selling her employee stock ownership plan from ICICI Bank in tranches over a period of five years after she became a whole time member of SEBI. Lokpal also rejected the complainants' argument that settlement orders were passed in favour of ICICI Bank.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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