Hindenburg questions Sebi chief Madhabi Buch's silence amid Congress claims

The Congress party levelled fresh allegations against Sebi chairperson Madhabi Buch and her husband, accusing her of 'wilful ignorance' when faced with a conflict of interest

Hindenburg Research, the United States-based short seller, on Wednesday criticised Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch for her prolonged silence on emerging issues in a post on social media. The statement came in response to recent allegations raised by India's opposition Congress party accusing both Buch and her husband of receiving additional funds from private entities.

 

"New allegations have emerged that the private consulting entity, 99 per cent owned by Sebi chairperson Madhabi Buch, accepted payments from multiple listed companies regulated by Sebi during her time as Sebi whole-time member. The companies include: Mahindra & Mahindra, ICICI Bank, Dr Reddy’s, and Pidilite. These allegations apply to Buch's Indian consulting entity with no details thus far on Buch's Singapore-based consulting entity," Hindenburg said in a post on X (formerly Twitter).

 

 

"Buch has maintained her complete silence for weeks on all of the emerging issues," Hindenburg added. 

New allegations have emerged that the private consulting entity, 99% owned by SEBI Chair Madhabi Buch, accepted payments from multiple listed companies regulated by SEBI during her time as SEBI Whole-Time Member.  The companies include: Mahindra & Mahindra, ICICI Bank, Dr.…

— Hindenburg Research (@HindenburgRes) September 11, 2024

Congress' allegations against Sebi chief Madhabi Buch

In a press briefing on Tuesday, Congress spokesperson Pawan Khera levelled fresh allegations against Sebi chairperson Madhabi Puri Buch, accusing her of "wilful concealment" of a conflict of interest. Khera claimed that Agora Advisory Pvt Ltd, a firm owned by Buch, had continued to provide consultancy services while she held office, contradicting her previous statements that the company had become dormant. 

Congress alleged that, contrary to Buch's earlier claims that the advisory firm became dormant when she assumed office, Agora continued providing services, generating revenues of Rs 2.95 crore between 2016 and 2024. Congress further claimed that Mahindra & Mahindra contributed Rs 2.59 crore—about 88 per cent of Agora’s total revenue during that period. 

In addition, Congress stated that Dhaval Buch, Madhabi Puri Buch’s husband, received Rs 4.78 crore in personal income from Mahindra & Mahindra, adding to the controversy. 

Company responses to Congress' allegations

Mahindra & Mahindra termed the allegations "false and misleading," asserting that they had never sought preferential treatment from Sebi. The company explained that Dhaval Buch had been hired in 2019 for his expertise in supply chain and management, well before Madhabi Buch became Sebi chairperson. The company added that none of the Sebi orders referenced in the allegations were relevant to the claims. 

A Dr Reddy's spokesperson clarified that Dhaval Buch was engaged by them for leadership coaching, with remuneration of Rs 6,58,000 between October 2020 and April 2021, which predated Buch’s appointment as Sebi chairperson. They dismissed any claims of receiving preferential treatment from Sebi. 

Pidilite Industries also refuted the allegations, stating that Dhaval Buch had been engaged in FY19-20 for his expertise in supply chain and procurement. They emphasised that there had never been any inquiries or cases involving Sebi regarding the company.

 

Hindenburg's allegations against Sebi chair Buch

Hindenburg previously accused Madhabi Puri Buch of a conflict of interest, alleging that both she and her husband held stakes in offshore entities involved in the Adani money siphoning scandal. These allegations were reportedly based on documents from a whistleblower and other investigative efforts. 

 

Buch's response

In a joint statement issued to the media, Madhabi Puri Buch and her husband strongly denied the allegations made by Hindenburg. "We strongly deny the baseless allegations and insinuations made in the report. The same are devoid of any truth," the statement read.

 

The couple affirmed that their finances had been fully disclosed to Sebi and welcomed further scrutiny from any authority. They also announced plans to release a detailed statement in the interest of transparency.