The Lokpal on Friday directed Securities and Exchange Board of India chairperson Madhabi Puri Buch to respond to complaints of financial irregularities filed against her by Trinamool Congress MP Mahua Moitra and two others.
The anti-corruption ombudsman, however, clarified that the order did not constitute an opinion about the case at hand, and that it was only a procedural direction.
A bench headed by chairperson AM Khanwilkar said that as per the Lokpal and Lokayuktas Act, 2013, Buch was being given a chance to explain her stand, after which the Lokpal would decide “whether there exists a prima facie case for investigation”.
On September 20, the Lokpal had directed Moitra and another complainant to explain in more detail their allegations of financial irregularities against Buch. The anti-corruption ombudsman had also asked the complainants to state what efforts they took to verify the claims made by United States-based short-seller Hindenburg Research on August 10.
The complainants subsequently filed affidavits further explaining their allegations against the Securities and Exchange Board of India chief. The Lokpal on Friday took note of the affidavits, and directed Buch to explain her stand within four weeks.
The case will be heard again on December 19.
The allegations
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 Research said it suspected that SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may have stemmed from the SEBI chief’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 Buch 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”.
Madhabi and Dhaval Buch described Hindenburg’s allegations as baseless, and claimed that the American short-seller chose “to attempt character assassination” in response to SEBI’s show cause notice to it.
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