SEBI chief row: FM says facts need to be taken on board

Finance minister Nirmala Sitharaman, during her latest TV interview, said Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and her husband Dhaval Buch are addressing the "conflict of interest" allegations levelled against them by the Congress party.

She said: “I think a few of the allegations are being answered by the Buchs. Putting out facts to contradict allegations by Congress, I think the facts are to be taken on board."

In its renewed attack on the SEBI chief, the Congress party on Sunday said that as a full-time member and later as chief of SEBI, Buch traded in listed securities. The Congress also alleged that between FY18 and FY23, she traded amount worth ₹37 crore while being in a position of power and influence, a violation of Section 6 of the SEBI code on conflict of interest.

The Congress also said that between 2021 and 2024, Puri Buch traded in four ETFs, including Global X MSCI China Consumer (CHIQ) and Invesco China Technologies ETF.

Last week, the SEBI chairperson and her husband had called the claims made by the Congress party as "false and malicious." Their six-page rebuttal addressed what they describe as a "malicious campaign", particularly regarding Dhaval's consulting assignments and Madhabi's tenure at SEBI as the chairperson.

They addressed criticisms regarding Dhaval's consulting work with Agora Advisory in India and Agora Partners in Singapore. Hindenburg Research, a U.S.-based short seller and Congress party had claimed that his professional appointments were influenced by Madhabi's position at SEBI.

“There seems to be an assumption that when a spouse of a senior government official is appointed as an advisor, it must be attributed to factors beyond professional merit. Such assumptions overlook the strength of qualifications and expertise and reach conclusions that are most unfortunate,” the statement said.

The Buchs countered the allegations by emphasising Dhaval’s qualifications having 35 years of experience, including his role as Executive Director at Hindustan Unilever and his position as Global Head of Procurement at Unilever until his retirement in 2019. They clarified that Dhaval's consultancy with Mahindra & Mahindra Group (M&M) began in 2019, three years before Madhabi's appointment as SEBI Chairperson, and was based solely on his merit and expertise.

The statement also clarified Madhabi's Employee Stock Options (ESOPs) from ICICI Bank, refuting claims of irregularities in her pension payments. It detailed that ICICI Bank's rules permit retired employees, like Madhabi, to exercise vested options over 10 years, contrary to allegations suggesting a three-month limit. They reiterated that Madhabi complied with all relevant guidelines concerning her ESOPs, emphasising that no conflict of interest occurred.

Amid the row, the U.S.-based short-seller Hindenburg Research had criticised Buch's "silence" on these issues. Hindenburg, which in August had released an extensive adverse report accusing Madhabi Buch and her spouse Dhaval Buch of having stakes in "obscure offshore funds" used in what it called the "Adani money siphoning scandal", said the new charges suggest she "accepted payments" from listed companies.