Hindenburg claims on SEBI chief Madhabi Puri Buch ‘highly disturbing’, says ex-FinMin official in letter to Sitharaman

Former Finance Ministry official EAS Sarma on Monday called on Finance Minister Nirmala Sitharaman to seek a judicial investigation into the allegations of conflict of interest, which are preventing Securities and Exchanges Board of India (SEBI) Chairperson Madhabi Puri Buch from putting charges on Adani Group, reported PTI.

In a letter to the finance minister, the former bureaucrat called the Hindenburg allegations against Buch “highly disturbing”, stating that an agency independent from the government should find out the factual accuracy of the allegations, as per the report.

"If the accusations made by Hindenburg are factually found to be correct, all investigations conducted during the last few years by the stock market regulator on external manipulation of stock market indices by a few corporate entities through their benami agencies need to be subject to a re-investigation," said Sarma, as per the report.

The former senior official also demanded that the government should request the Chief Justice of India (CJI) to nominate a senior member to head an inquiry commission that “can serve the cause of upholding the public trust and eliciting public trust,” according to the report.

“The Inquiry Commission's proceedings should be in the public domain and its report submitted to the Parliament within a time-bound manner,” said Sarma, as per the report. “Such accusations should wake up the powers that be to refrain from interfering with the independence of any statutory institution for that matter, as such interference will erode public trust and credibility of that institution,” he said. 

Hindenburg vs SEBI:

Hindenburg Research released a blog report on Saturday, August 10, claiming that SEBI Chairperson Buch and her husband, Dhaval Buch, had undisclosed investments in offshore funds of Bermuda and Mauritius, which were used to siphon money by Vinod Adani from the Adani Group conglomerate.

On Sunday, August 11, Madhavi Puri Buch denied the claims of the US-based short seller about her involvement in non-disclosure. The capital market regulator SEBI put out an official statement on Sunday stating that the relevant disclosures were made by Buch and Hindenburg's claims were “inappropriate.”

EAS Sarma served in the Ministry of Finance between 1999 and 2000, and he also questioned if the regulator made straightforward disclosures to the Ministry of Finance of the situation of a possible conflict of interest. He also inquired about the information being disseminated to the Cabinet Committee on Appointments, as per the report.