Congress accuses SEBI chief Madhabi Buch of corruption for gaining rent income from Wockhardt firm: Here’s what we know

  • Congress has alleged that SEBI chief Buch received rent income from a firm linked to Wockhardt --a company that was being investigated by SEBI for various cases, including that of insider trading during 2023

Nikita Prasad
Published6 Sep 2024, 02:53 PM IST
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SEBI Chairperson Madhabi Puri Buch is mired in multiple allegations of corruption, conflict of interest over salary benefits, previous stints. (PTI)
SEBI Chairperson Madhabi Puri Buch is mired in multiple allegations of corruption, conflict of interest over salary benefits, previous stints. (PTI)

Opposition Congress has accused the Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch of “out and out corruption," claiming that she received rental income from an entity affiliated with Wockhdart that was placed under probe for various cases, including that of insider trading.

Throwing a fresh set of allegations, Congress' media and publicity department head Pawan Khera said that between 2018 and 2024, Buch -- as a whole-time member and later chairperson of capital market regulator SEBI-- had been receiving rental income amounting to 2.16 crore from "Carol Info Services Limited", a company affiliated to Wockhardt Limited.

Also Read: SEBI employees protest outside Mumbai office, demand chairperson Madhabi Puri Buch’s resignation: Report

SEBI was investigating Wockhardt Limited for various cases, including insider trading during 2023. Khera asserted that this was an outright case of corruption that invoked conflict of interest, violating sections 4, 7 and 8 of SEBI's 2008 code on conflict of interests for members of its board. Khera added that he is challenging the SEBI chief to come out and deny the charges against her.

Congress levels fresh corruption allegations against SEBI chief

"The SEBI chairperson was appointed on March 2, 2022, by the Appointments Committee of the Cabinet, which the prime minister heads. Was her appointment cleared on the condition that she could maintain her previous financial relationships, provided she acted in line with the wishes of the prime minister and his close associates?" the Congress leader asked.

Khera pointed out that previous SEBI chairpersons went to great lengths to avoid even the appearance of a conflict of interest, both in their roles at SEBI and in their earlier positions. He asked why there was no effort to verify whether Buch would follow these established standards.

Also Read: SEBI refutes ‘toxic work culture’ allegations, cites high employee standards amid protests: What we know so far

"Or was this lack of scrutiny part of a mutually beneficial arrangement?" Khera asked. "If the head of the regulatory body is compromised, then that head becomes pliable. Perhaps that was the objective," the Congress leader said.

"For instance, M Damodaran sold his 50 SBI shares when he took over UTI in 2001. CB Bhave recused himself from all matters involving the National Securities Depository Limited (NSDL), where he was formerly chairman. In contrast, Ms Buch merely transferred her investments to her spouse, which raises concerns about credibility," Khera said.

Khera said he was challenging the SEBI chief to come out and deny the charges against her. On Thursday, Congress demanded an independent inquiry into the matter, asserting that it was in the national interest to have a probe as foreign investors were getting concerned and there were doubts about the integrity of India's stock markets.

Also Read: ‘How can retirement benefits exceed salary from ICICI?’ — Congress fires fresh ammo at SEBI chief Madhabi Puri Buch

On Monday, the opposition party also levelled conflict of interest allegations against SEBI Chairperson Buch and asked Modi to come clean as the head of the Appointments Committee of the Cabinet during her appointment. Congress said that the Supreme Court should take cognisance of the revelations and demanded that she be dismissed immediately.

The Congress had alleged that since the current SEBI chairperson took office in 2017, she was not only drawing a salary from SEBI but also holding an office of profit at ICICI Bank, continuing to receive income from it.

Subsequently, ICICI Bank said it had not paid any salary or granted ESOPs to Buch after her retirement on October 31, 2013, as alleged by Congress. The Congress, in turn, questioned ICICI Bank's assertion that it had not paid any salary or granted ESOPs to the SEBI chairperson after her retirement and asked that if the amount paid to her was her "retiral benefit", why it was non-uniform -- both in terms of its frequency and amount.

Last month, US short-seller Hindenburg Research accused Buch and her husband Dhaval Buch of owning stakes in offshore funds used to allegedly inflate Adani Group stocks, which was under investigation for allegedly rigging stock prices. The SEBI chief and her husband denied the allegations, terming them ‘baseless’ and an attempted ‘character assassination.’

Parliamentary panel to likely summon SEBI chief for review

The Parliament's Public Accounts Committee has decided to review the performance of regulatory bodies established by Acts of Parliament amid a political storm over allegations of conflict of interest against the SEBI chairperson.

The Public Accounts Committee (PAC) Chairman K C Venugopal said the Committee will likely summon Buch to examine the allegations against her. "Rest of the things, the Committee has to take a decision," Venugopal said to questions on summoning the SEBI chairperson before the PAC.

Also Read: Hindenburg’s new report alleges Sebi chief, husband owned stakes in offshore firms linked to Adanis

Among the suo-moto subjects selected by the Committee are a performance review of regulatory bodies established by Acts of Parliament, reforms in the banking and insurance sector, and a review of the implementation of centrally sponsored welfare schemes, among other sectoral and industry-wise reviews.

The PAC will hold its next meeting on September 10 when representatives of the Jal Shakti ministry will brief the panel on the 'Performance Audit on National Rural Drinking Water Programme (Jal Jeevan Mission)' based on a CAG report.

The PAC will also audit "fees, tariffs, user charges and so on" levied at public infrastructure such as airports. Currently, the Adani Group manages seven Indian airports. The PAC is responsible for auditing the government's revenue and expenditures.

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First Published:6 Sep 2024, 02:53 PM IST
Business NewsMarketsStock MarketsCongress accuses SEBI chief Madhabi Buch of corruption for gaining rent income from Wockhardt firm: Here’s what we know

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