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The Securities and Exchange Board of India (Sebi) will hold a crucial meeting on Monday, marking its first official gathering since serious allegations were raised against chairperson Madhabi Puri Buch by Hindenburg Research and India’s Congress party. Additionally, complaints from Sebi employees regarding work culture have added to the mounting pressures on the regulator.
Although the official agenda for Monday’s meeting does not include the conflict of interest accusations against Buch, media reports suggest the topic is likely to be discussed informally.
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Sebi’s board comprises four full-time members and three part-time representatives from key institutions, including the Ministry of Finance, the Ministry of Corporate Affairs, and the Reserve Bank of India.
Hindenburg's conflict of interest allegations
Hindenburg Research, a US-based short-selling firm, recently levelled accusations against Buch and her husband, Dhaval Buch, alleging their involvement in offshore investments linked to Vinod Adani, brother of industrialist Gautam Adani, who leads the Adani Group. These offshore funds were allegedly used to manipulate the stock prices of Adani Group’s publicly listed companies in India.
Buch, who was appointed as Sebi chairperson in 2022, previously oversaw a regulatory investigation into these allegations and gave the Adani Group a clean chit. Hindenburg’s report claims that despite this, the Buch family’s financial connections to Adani-affiliated funds pose a conflict of interest. Additionally, the report accused Sebi of revising regulations surrounding real estate investment trusts (REITs) in a way that disproportionately benefited Blackstone, a global investment firm where Dhaval Buch holds a senior advisory position.
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Congress' allegations against Sebi
India's Congress party has also made allegations against Buch, accusing her of violating Sebi’s conflict of interest rules. They claimed she traded in listed securities and sold employee stock options from her previous role at ICICI Bank while serving at Sebi. Further accusations pointed to her advisory firm, Agora Advisory, which allegedly provided consultancy services to several major companies—including Mahindra & Mahindra and ICICI—while Buch was a whole-time director at Sebi.
Both ICICI and Mahindra & Mahindra have denied these accusations, while Buch and her husband have consistently maintained that they have complied with all necessary disclosures, including sharing details of their holdings in Agora Advisory and Agora Partners when Buch joined Sebi as a whole-time member in 2017.
Sebi employee complaints
The tensions have been exacerbated by internal unrest within Sebi. Employees lodged a complaint with the Ministry of Finance, alleging a "toxic work culture" within the institution. According to the complaint, staff members have been subjected to immense pressure, creating a stressful working environment. Initially, Sebi blamed external forces for the discontent but later withdrew this statement after backlash from its employees.
What’s next?
Despite the mounting controversies, Sebi has yet to make an official statement on the allegations. Monday’s meeting is expected to be significant, even though the issues of conflict of interest and employee grievances are not on the formal agenda. According to a source familiar with the situation, the board will likely take informal cognisance of these developments.
“Between the last board meeting and Monday's, any significant event concerning the institution, its board members, including the chairperson, has to be taken note of by the board,” said a source to Mint and The Economic Times.
The outcome of Monday’s meeting could determine how Sebi moves forward in addressing the controversies surrounding its leadership while the regulatory body continues its operations amid heightened scrutiny.
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