Lokpal dismisses complaints against ex-Sebi chief Buch in Adani case

Complaints against Madhabi Puri Buch in the Adani-Hindenburg matter were dismissed by the Lokpal for lacking evidence and being based on presumptions and assumptions

The Lokpal of India has disposed of petitions filed against Madhabi Puri Buch, former chairperson of the Securities and Exchange Board of India (Sebi), relating to allegations of corruption in the Adani-Hindenburg matter.

 

The complaints against Buch were based on allegations made by the now-disbanded short-seller Hindenburg Research. Hindenburg had questioned Sebi’s investigations into the Adani matter, alleging a “conflict of interest” involving Buch. However, the Lokpal concluded that the allegations were based on presumptions and assumptions, lacked verifiable evidence, and failed to meet the criteria for offences under Part III of the Prevention of Corruption Act, 1988. As a result, the Lokpal refused to pursue further investigations.

 

While the Lokpal had previously noted that the Hindenburg report alone could not serve as the basis for action against Buch, the complainants had presented their allegations independently of the report. Nevertheless, the Lokpal found these to be untenable, unsubstantiated and frivolous.

 

One of the key allegations was a quid pro quo involving a settlement by ICICI Bank relating to Employee Stock Option Plans (ESOPs) granted to Buch during her tenure with the bank. The Lokpal dismissed this claim as meritless, stating that it was unreasonable to link stock options granted in 2011 to actions taken years later, particularly in the absence of any evidence that Buch was involved in the decision-making process of Sebi’s High-Powered Committee. 

 

Buch had also sought action against one of the complainants for obtaining and publicising her income-tax returns without consent, thereby invading her privacy. The Lokpal advised Buch to approach the appropriate forum for this matter.

 

Regarding allegations that Puri Buch’s husband, Dhaval Buch, had a quid pro quo arrangement due to his association with Blackstone and its involvement with Real Estate Investment Trusts (REITs), the Lokpal noted that Sebi had registered the first set of REITs before Dhaval joined Blackstone. It further observed that Buch had disclosed her advisory firms and the transfer of holdings to her husband, with no evidence suggesting she continued consultancy work after joining Sebi.

 

The Lokpal took a firm stance against other frivolous allegations as well.