Informist, Thursday, Sep 12, 2024

--SEBI part-time member: It's for govt to act on allegations vs Buch

By Rajesh Gajra

MUMBAI – It is for the government to take action on the multiple allegations of conflicts of interest involving Securities and Exchange Board of India Chairperson Madhabi Puri Buch, a part-time member of the market regulator told Informist on condition of anonymity. The SEBI member refused to offer any further comments on the matter.

The SEBI part-time member's comments were in response to Informist's question on whether the board members of the market regulator, excluding the chairperson, will take any action on the allegations made by US short seller Hindenburg Research, and the Congress party against Buch. The crux of these allegations is that Buch, while functioning as SEBI chief from March 2022, and earlier as whole time member during 2017-21, earned income or revenue from various sources outside SEBI, particularly her Indian consultancy firm Agora Advisory, which may or may not have been disclosed internally to the board. Following Hindenburg's report in the matter on Aug 10, SEBI had issued a press release saying that Buch had made all relevant disclosures.

The market regulator's board will hold a meeting at the end of this month, where the board members will discuss and decide on the agenda for the meeting, the SEBI part-time member said. However, he refused to say if the allegations against Buch would be discussed at this meeting. The SEBI board had last met on Jun 28.

As per SEBI's code on conflict of interest for members of the board, including the chairperson, operative from December 2008, a member's personal interest or association which is likely to influence the decision of the board has to be disclosed upfront. Additionally, a SEBI member, including the chairperson, in case of conflict of interest, has to recuse himself or herself from relevant matters heard and reviewed by the board.

Hindenburg Research had accused SEBI Chairperson Buch of conflict of interest in the Adani group case, the promotion of real estate investment trusts, and the near 24-mln-rupee revenue generated by consultancy firm Agora Advisory, in which she held a 99% stake in the three years till 2023-24 (Apr-Mar).

On Tuesday, the Congress party alleged that Buch's consulting firm, Agora Advisory, received payments of 29.5 mln rupees from six companies from 2016-17 to 2023-24, except in 2017-18 and 2018-19, from companies for consultancy services. It alleged that 25.9 mln rupees were received from Mahindra & Mahindra Ltd and the balance 3.4 mln rupees were paid by Dr Reddy's Laboratories Ltd, Pidilite Industries Ltd, ICICI Bank Ltd, Sembcorp Ltd, and Visu Leasing & Finance. End

Edited by Tanima Banerjee

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