Conflict of interest: Buch drew salary from ICICI while at Sebi, says Congress

Congress leader Pawan Khera accuses Buch of receiving remuneration not only from the government but also from ICICI Bank and ICICI Prudential.

Congress leader Pawan Khera on Monday raised serious concerns about Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch. In a press conference, Khera accused Buch of receiving remuneration not only from the government but also from private entities, including ICICI Bank and ICICI Prudential, while serving in her official capacity, marking this as a serious conflict of interest.

Khera had earlier teased on social media that a "big expose" would be announced in today's press conference.

Khera claimed that multiple investigations involving ICICI Bank had been concluded while Buch was allegedly drawing income from these private institutions. He called on the Sebi chairperson to issue a public clarification regarding these accusations.

 

A press note released by Congress leader Jairam Ramesh further added that Sebi Chair Buch received Rs 16.8 crore from ICICI since joining Sebi in 2017. Ramesh added that this was 5.09 times more than her salary from Sebi during the same period, which was reportedly Rs 3.3 crore.

ICICI Bank, ICICI Securities merger

Sebi's current critiism stems from some shareholders regarding its involvement in the merger between ICICI Bank Ltd and its subsidiary, ICICI Securities.

The merger, announced in June last year, involved ICICI Bank offering 67 of its shares for every 100 shares of ICICI Securities, a company in which the bank already holds nearly 75 per cent. The merger has raised concerns among shareholders who feel aggrieved by the terms of the deal and Sebi's role in overseeing it.

Buch and Hindenburg Research

Khera's comments follow a series of allegations by the US-based short seller Hindenburg Research. On August 10, Hindenburg accused Buch and her husband of making investments in obscure offshore funds, which it claimed were used in the “Adani money siphoning scandal.” This allegation builds on Hindenburg’s earlier report from January 2023, which accused the Adani Group of financial misconduct and stock manipulation.

According to Hindenburg, Sebi may have circumvented its investigation into the Adani Group due to Buch's alleged conflict of interest. Both Sebi and the Adani Group, however, have categorically denied these accusations. 

Buch responded to the accusations by dismissing them as "character assassination." She emphasised that she has made all necessary disclosures and recusals to avoid any potential conflicts of interest.

On August 16, Reuters reported that Buch had received income from a consultancy firm while serving as Sebi's chairperson, a practice that may breach regulatory norms. Buch, who joined Sebi in 2017 and was appointed its chair in March 2022, has denied any wrongdoing, stating that she made all necessary disclosures.

The controversy deepened when it was revealed that Hindenburg's recent report identified two consultancy firms—Singapore-based Agora Partners and India-based Agora Advisory—linked to Buch and her husband, Dhaval Buch.

Despite the mounting allegations, the Finance Ministry has denied media reports suggesting that it was considering forming a panel to investigate the claims against Buch.

Congress party criticism of Sebi chair

The Congress party, known for its vocal criticism of the alleged ties between the Adani Group and the ruling Bharatiya Janata Party (BJP), has continued to press for accountability. Khera, in particular, has been outspoken, posting his concerns on his X (formerly Twitter) account. His post read:

"The shocking revelations of the #HindenburgReport do not just expose the cosy relationship between SEBI chief and the Adani group, they show how appointments to watchdog institutions are made in this government. A simple due diligence done by the government before appointing Ms Madhabi Puri Buch as #SEBIChairperson would have brought these damning details out. It would be naive to believe that those in the government were not aware of these offshore investments of Ms Madhabi Puri Buch and Mr Dhaval Buch. The buck stops at the doorstep of the Prime Minister of India. Only a Joint Parliamentary Committee (JPC) can get all the answers."

The Opposition party’s demand for a Joint Parliamentary Committee (JPC) investigation has gained momentum, setting the stage for further political confrontation.