 "Congress launches fresh attack on Sebi chief Buch over rental income")
The Congress party on Friday levelled fresh allegations against chairperson of the Securities and Exchange Board of India (Sebi) Madhabi Puri Buch, claiming that she received rental income from an entity affiliated with a company the market regulator was probing for various violations, including insider trading.
The opposition party said that in the last six financial years - between FY19 and FY24 – Buch earned a total rental income of Rs 2.16 crore from Carol Info Services, a company linked to Wockhardt that Sebi has been involved with in various cases. Buch was a whole-time member (WTM) with Sebi between April 2017 and October 2021 and took charge as its chief in March 2022.
The Congress accused Buch of maintaining this financial relationship while overseeing Sebi’s investigation into Wockhardt and claimed that it constituted a conflict of interest.
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Neither the market regulator nor Buch have responded to the latest allegations leveled by Congress.
“Previous Sebi chairpersons have gone to great lengths to avoid even the appearance of a conflict of interest, both in their roles at Sebi and in their previous positions...In contrast, Ms Buch merely transferred her investments to her spouse, which raises concerns about credibility,” it said.
Shares of Wockhardt hit a lower circuit of 5 per cent, closing at Rs 1,035 apiece on Friday, amid the allegations against Buch.
“We categorically deny these allegations and state that these are completely baseless and misleading. The company has acted and continues to act in compliance with all applicable laws,” said Wochkardt in an exchange filing on Friday.
The four orders cited by the Congress party, including two settlement orders, are from March 2023 and July 2023.
In one of the settlement orders, Wochardt paid Rs 27 lakh in February 2023 to Sebi as recommended by a high-powered advisory committee of the market regulator.
The second settlement order was issued in May 2023, where Wockhardt paid Rs 36.7 lakh as the settlement amount.
However, the other two orders the Congress party mentioned in its release pertain to the same matter. The orders were issued at different stages of the probe. The noticees were executives of Wockhardt, who were accused of insider trading.
Sebi had ordered a disgorgement of Rs 14.23 lakh along with 4 per cent interest for the previous 10 years on a former executive of Wockhardt for flouting insider trading norms. In the order dated July 31, 2023, the executive was also debarred from the securities market.
“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 party asked.
This is the third attack from the Opposition on the Sebi chief in a series of ‘revelations’ on her income and alleged associations.
Earlier this week, the Congress party raised questions on the alleged payments and ESOPs to Buch from her former employer ICICI Bank, both in terms of the amount and the frequency of payouts.
The private lender denied those claims, saying Buch was not paid a salary or granted any ESOPs after her retirement in October 2013.
The bank added that its employees had the choice to exercise their ESOPs anytime up to a period of 10 years from the date of vesting.
Buch found herself in the eye of a storm this week. After the Congress’ conflict of interest claims, Zee Entertainment promoter Subhash Chandra (who is being probed for diversion of funds) leveled allegations of ‘corruption’ against her. A group of Sebi employees also protested on Thursday, demanding her resignation.
The Congress’ fresh allegations came days after Hindenburg Research launched a fresh broadside against Buch, alleging that she and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal.
Buch has rejected the allegations as “baseless” and asserted that she had made all disclosures and adhered to a recusal list.
Adani group had also termed the allegations malicious and manipulative of select public information, saying it had no commercial relationship with the Sebi chairperson or her husband.