Was govt aware of these 'facts' since 2022? Congress attacks FM Sitharaman over Sebi chief, husband's responses

The Congress party has escalated its scrutiny of SEBI Chairperson Madhabi Buch, focusing on her and her husband Dhaval Buch’s financial dealings. Congress General Secretary Jairam Ramesh questioned whether Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi were aware of these issues since 2022 and whether they view them as trivial. He expressed concern that the facts presented have not been contradicted by any authority.

Ramesh stated, “The finance minister has finally broken the Union government's silence on the issue of the multiple conflicts of interest of the SEBI chairperson. She has said that the SEBI chairperson and Mr. Buch are ‘answering on allegations of conflict of interest’. But these answers raise even more questions.” He further questioned the fairness of SEBI's investigation into the Adani Group, asking, “Has the Supreme Court-mandated SEBI investigation into the Adani Group really been fair, impartial, and complete?”



Ramesh further queried whether Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman knew about these facts since 2022. "Do they really think that these facts are trivial and do not, in any way, compromise the functioning of the capital markets regulator?" he said.

The SEBI chairperson and her husband have denied any wrongdoing. They issued a joint statement calling the allegations "false, malicious and motivated." They asserted that Madhabi Buch has followed SEBI's recusal guidelines and has made all necessary disclosures.

Buchs’ Defence Against Allegations

In a joint statement issued last Friday, Madhabi Buch and her husband Dhaval Buch denied the allegations of conflict of interest and impropriety. They described these allegations as “false, malicious and motivated,” asserting that they have adhered to all SEBI guidelines.

The statement clarified that Madhabi Buch never handled files involving Agora Advisory or Agora Partners, firms where she had significant financial interests prior to joining SEBI in 2017. It also stated that she had no involvement with files related to the Mahindra Group, Pidilite Industries, Dr. Reddy’s Laboratories, Alvarez and Marsal, or Sembcorp during her tenure at SEBI.

The Buchs also addressed payments received from ICICI Bank while Buch was a SEBI member, explaining that these were related to a contributory annuity scheme and ESOPs over a decade. They emphasized that SEBI guidelines permit board members to hold and transact in ESOPs.

The controversy initially stemmed from allegations by Hindenburg Research accusing the Buchs of past investments in a fund used by Adani associates to manipulate stock prices. Congress has also pointed to consultancy fees from various firms as further conflict of interest.

Finance Minister Nirmala Sitharaman’s Comments

Finance Minister Nirmala Sitharaman, in her first remarks on the matter, defended the Buchs. She stated, “Quite a few of the allegations have been answered... I think the facts will have to be taken on board.” Sitharaman acknowledged that Buch and her husband are “answering the allegations and putting out facts that contradict those which the Congress party is alleging.” However, she added, “I’m not here to judge that,” when asked about her satisfaction with the Buchs' responses.

Congress spokesperson Pawan Khera alleged that between 2017 and 2023, Buch traded in listed securities worth Rs 36.9 crore, which he claimed violated Section 6 of SEBI’s Code on Conflict of Interest. Khera also questioned when Buch first declared her foreign assets and her involvement with Agora Partners PTE in Singapore. He further alleged that Buch held a 99 percent stake in a firm that provided consultancy services to Mahindra and Mahindra Group, with her husband receiving Rs 4.78 crore from the conglomerate.

The Mahindra and Mahindra Group dismissed the Congress allegations as “false and misleading in nature,” asserting that they had not requested any preferential treatment from SEBI. The group affirmed its commitment to high standards of corporate governance.

(With inputs from PTI)