'False and misleading': M&M refutes Congress charges of favouring Buchs

Opposition party says Sebi chairperson's husband received money from M&M

Mahindra & Mahindra (M&M) on Tuesday refuted allegations levelled by the Congress that the conglomerate paid Dhaval Buch, husband of Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (Sebi), to receive preferential treatment from the market regulator.

The country’s main Opposition party alleged that Dhaval received Rs 4.78 crore from the automotive (auto) major between 2019 and 2021 when Sebi had issued nearly four orders against M&M.

M&M termed the allegations as “false and misleading”. It clarified that Dhaval was hired by Mahindra Group in 2019 “specifically for his expertise in supply chain and sourcing” after he retired as Unilever’s global chief procurement officer.

 

“We categorically state that we have not, at any point, requested Sebi for any preferential treatment. We maintain the highest standards of corporate governance,” said the automaker in an exchange filing.

Dhaval is on the board of Bristlecone, a subsidiary of M&M.

“He joined Mahindra Group almost three years before Ms Puri Buch was appointed Sebi chairperson. Compensation has been specifically and only for Mr Dhaval Buch’s supply chain expertise and management acumen, based on his global experience at Unilever,” said M&M.

The group added that none of the orders or approvals referred to in the Congress party’s allegations were relevant, as three of them did not pertain to the company or its subsidiaries, while one was a fast-track rights issue that did not require any approval from Sebi.

Another order claimed by the Congress as a conflict of interest was from March 2018, before Dhaval started working with Mahindra Group.

The Opposition party also alleged that Buch’s consultancy firm, Agora Advisory, received income from M&M, Dr Reddy’s Laboratories (DRL), Pidilite, ICICI Group, and two other organisations while Puri Buch was holding positions in the market regulator.

DRL also clarified that they engaged the services of Dhaval for leadership coaching for a limited period from October 2020 to April 2021, based on his past role at Unilever.

In an exchange filing, the pharmaceutical (pharma) major said that the total remuneration of Rs 6.58 lakh to Dhaval was in line with that offered to other coaches.

“The assignment started and ended well before Ms Puri Buch’s term as Sebi chairperson. Any suggestion that the company was treated differently by Sebi as a result of this would be baseless and malafide. The company has and continues to operate in compliance with all applicable laws,” said DRL.

 

Pidilite too responded to the allegations by stating that it had engaged Agora Advisory and Dhaval’s services for his expertise in supply chain and procurement as part of its routine requirements. The company added that there has never been any enquiry or cases from Sebi concerning the company.

“The company engages with multiple partners and consultants who are renowned professionals in their respective fields. As part of its routine requirements, the company in 2019-20 had engaged Agora Advisory’s Mr Dhaval Buch, a globally renowned supply chain and procurement professional, for his services in these areas. We further state that there have never been any enquiries or cases from Sebi vis-à-vis the company,” Pidilite said in an exchange filing.

Agora Advisory is a consultancy firm co-founded by Puri Buch and her husband Dhaval.

“This is a case of wilful concealment and conflict of interest,” said Congress leader Pawan Khera, adding that his party will release more information this week. “The companies that have financial relationships with Agora are all being adjudicated by Sebi.”

Khera reiterated that the advisory firm was “active” while the Sebi chairperson had claimed it to have become dormant during her time at Sebi.

Hindenburg Research, a US-based short seller, had in its follow-up report stated that Agora generated Rs 2.54 crore in income between 2020-21 and 2023-24.

The website of the Ministry of Corporate Affairs showed Dhaval as a director of Agora Advisory.

Earlier, Khera had alleged that the rental income from a firm affiliated with Wockhardt, a pharma and biotechnology company, was a case of corruption. It accused Buch of maintaining a financial relationship with the company while overseeing Sebi’s investigation into Wockhardt, claiming that it amounted to a conflict of interest.

“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 Wockhardt in an exchange filing on Friday.

Puri Buch was first appointed Sebi whole-time member in April 2017. She demitted office in October 2021 and once again joined the securities regulator as chairperson in March 2022.

Following  Hindenburg’s allegations, both Sebi and the Buchs issued separate statements rebutting all the allegations, terming them baseless and an attempt at character assassination.

The Congress party has also raised questions about the alleged payments and employee stock ownership plans (Esops) to Puri Buch from her former employer ICICI Bank, both in terms of the amount and the frequency of payouts.

The private lender rejected the allegations, saying Puri 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.