Madhabi Puri Buch, the head of India’s Securities and Exchange Board (SEBI), is facing scrutiny for allegedly breaching regulations during her seven-year tenure by continuing to earn revenue from a consultancy firm, according to public documents examined by Reuters.
Hindenburg Research has raised concerns about a potential conflict of interest involving Buch in her investigations into the Adani Group. The allegations, which surfaced in January of the previous year, led to a significant drop in the share prices of Adani Enterprises and other affiliated firms. Although these shares later recovered, the SEBI is currently investigating the matter.
In response to the allegations, Buch issued a statement on August 11, rejecting the claims as an attempt at “character assassination” and denying any conflict of interest. The U.S. short-seller Hindenburg Research has also highlighted two consultancy firms, Agora Partners based in Singapore and Agora Advisory in India, run by Buch and her husband.
Buch, who joined SEBI in 2017 and became its chairperson in March 2022, had a notable financial stake in Agora Advisory Pvt Ltd, which she owned 99% of. Public documents reviewed by Reuters show that Agora Advisory earned 37.1 million rupees ($442,025) during her tenure. This financial activity potentially conflicts with a 2008 SEBI policy that prohibits officials from holding an office of profit or receiving professional fees from other activities.
Buch asserted that the consultancy firms were disclosed to SEBI, and her husband utilized these firms for his consulting business following his retirement from Unilever in 2019. However, Buch and SEBI have not responded to inquiries seeking further comment.
Hindenburg’s latest report notes that Buch transferred all her shares in Agora Partners to her husband in March 2022, yet company records for the fiscal year ending March 2024 indicate that Buch still retains shares in the Indian consultancy firm.
The documents reviewed do not provide details about the business conducted by these consultancy firms, nor is there any evidence suggesting that the revenue generated was linked to the Adani Group. Subhash Chandra Garg, a former senior Indian government official and SEBI board member during Buch’s tenure, criticized Buch’s ongoing ownership of the firm as a “very serious” breach of conduct.
Garg stated, “There was no justification for her to continue to own the firm after she joined the board. She could not have been allowed even after making disclosures.” He added, “This makes her position completely untenable at the regulator.”
Buch has yet to clarify whether she received a waiver to maintain her shareholding in the Indian consulting firm, and a specific query on this issue has not been addressed. The controversy has spurred calls for Buch’s resignation, including from opposition leaders, while a spokesperson for the ruling Bharatiya Janata Party (BJP) labeled the allegations as baseless.
Garg and another SEBI board member revealed that no disclosures regarding Buch’s business interests were made to the board. According to the board member, “There was a requirement to make annual disclosures, but board members’ disclosures were not placed in front of the board for information or scrutiny.” This member, who preferred to remain anonymous, added, “To be sure, no members’ disclosures were discussed. If the disclosures were made only in front of Ajay Tyagi, the then chairperson, I am not privy to that.”
Inquiries to Ajay Tyagi about whether he had received disclosures were not answered.
The investigation into Buch’s consultancy activities continues amid ongoing debates about regulatory oversight and conflict of interest in India’s financial sector.
