The Lokpal on Friday directed two individuals who complained against Securities and Exchange Board of India chairperson Madhabi Puri Buch to explain in more detail their allegations of financial irregularities against her.
The anti-corruption ombudsman told the complainants to “articulate the allegations” against Buch that constitute the offence of corruption within the meaning of the Prevention of Corruption Act. It also asked them to explain what efforts they took to verify the claims made by United States-based short-seller Hindenburg Research on August 10.
A four-member Lokpal bench, headed by former Supreme Court judge AM Khanwilkar, has in its order redacted the names of both the complainants as well as the person against whom the petitions were filed – the SEBI chairperson. One of the complainants is Trinamool Congress MP Mahua Moitra.
The Lokpal said that Moitra’s complaint fell short of persuading it to order a preliminary inquiry, and asked her to explain her allegations of impropriety against Buch.
On August 10, Hindenburg Research alleged that the SEBI chief and her husband Dhaval Buch had “hidden stakes” in offshore entities tied to stock price manipulation and money laundering by the Adani Group. Madhabi and Dhaval Buch denied the allegations in a statement to the press.
This came 18 months after the US-based firm accused the Adani Group of engaging in accounting fraud and money laundering using offshore tax havens. The market regulator, led by Madhabi Buch, had “drawn a blank” in its investigation of these allegations last year and told a Supreme Court-appointed panel that further enquiry could be a “journey without a destination.”
Hindenburg report
Hindenburg Research, in its report, said it suspected that SEBI’s unwillingness to “take meaningful action against suspect offshore shareholders in the Adani Group may stem from Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of [Adani Group chairperson] Gautam Adani”.
Moitra, in her complaint, referred to these allegations and said that the SEBI chief was a “serial offender” and had engaged in actions that constituted impropriety on the part of a public servant.
The Trinamool Congress MP also referred to statutory documents that contradicted the SEBI chairperson’s claim that two firms she set up became dormant when she began working with the market regulator in 2017. Hindenburg Research had flagged the two firms – Singaporean consulting firm Agora Partners and Indian consulting business, Agora Advisory – as possible areas of conflict of interest.
On August 13, Scroll reported that Agora Advisory was active between 2019 and 2024 and had made Rs 3.63 crore in revenue from its operations, contradicting Buch’s claim that both firms became “immediately dormant on her appointment with SEBI”.
Also read: SEBI chief claims her firms went ‘dormant’. Documents show otherwise
Lokpal points to SC order
However, the Lokpal, in its order on Friday, pointed to a Supreme Court order from January 3 that said there was no regulatory failure on the part of SEBI. The top court had refused to transfer the matter from the market regulator to a Special Investigation Team.
In August last year, SEBI told the Supreme Court that out of the 24 investigations in the Adani-Hindenburg case, 22 have been finalised, while the remaining two are currently underway. The market regulator, however, did not provide any details about its findings.
The Lokpal, in its order on Friday, asked the complainants if their case was that the Hindenburg Research’s report from August 10 was limited to the two remaining matters before SEBI.
Buy an annual Scroll Membership to support independent journalism and get special benefits.
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!