Buchs hit back, call 'conflict of interest' allegations 'malicious'

Responding to the allegations of conflict of interest, SEBI chairperson Madhabi Puri Buch and her husband, Dhaval Buch, issued a fresh joint statement today, calling the claims "false and malicious."

Their six-page rebuttal offers detailed clarifications, addressing what they describe as a "malicious campaign", particularly regarding Dhaval's consulting assignments and Madhabi's tenure at SEBI as the chairperson.

The statement first addressed criticisms regarding Dhaval's consulting work with Agora Advisory in India and Agora Partners in Singapore. Hindenburg Research, a short-seller research firm 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.

M&M, which accounted for 94% of Agora Advisory's income, clarified that none of the five SEBI orders referenced in the allegations were relevant to the company. Quoting the Group, the statement said that three of the orders did not pertain to M&M or its subsidiaries, one was a fast-track rights issue not requiring SEBI’s approval, and the other was an order issued well before Dhaval's association with the Mahindra Group.

The statement also included comments from other companies associated with the allegations. Pidilite, contributing to about 4% of Agora Advisory’s income since 2019, and other clients like Dr. Reddy’s, supported this narrative, affirming that Dhaval's consulting work was entirely independent of any influence from Madhabi’s role at SEBI.

“Madhabi has complied with all the disclosure and recusal guidelines of SEBI, and, maintained a proactive continuing recusal list with SEBI over and above the requirements under the guidelines,” the statement said.

“Over and above all of the aforesaid, right from 2017, when Madhabi joined SEBI as a Whole Time Member, she had disclosed the fact of her shareholding in Agora Advisory as well as in Agora Partners,” the statement added.

The wife-husband duo also addressed allegations concerning rental income from a property leased to a Wockhardt associate, clarifying that Madhabi had no involvement in any SEBI investigations related to the company.

They emphasised that the rental agreement was conducted under standard market terms and fully disclosed to SEBI since Madhabi’s 2017 appointment. They dismissed the allegations as defamatory and false, asserting that the rental income was consistent with market rates and properly declared and taxed.

“In this context, even an allegation of conflict is not only defamatory, false and vexatious, but is clearly malicious and motivated,” the statement said.

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 ten 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.

“It is to be noted that SEBI’s guidelines permit board members including the chairperson to hold and transact in ESOPs,” the statement said.

The Buchs concluded by reaffirming their commitment to transparency and professionalism, stating that all relevant details had been disclosed in their tax returns. They expressed disappointment at being questioned and suggested that the ongoing campaign aimed to create a false narrative.

“Shockingly, our income tax returns have been illegally obtained through fraudulent means, breaching our right to privacy and violating the Income Tax Act,” the statement said. “It seems the allegations are being made in instalments only to keep the pot boiling,” it added.

Despite this, they expressed confidence in disproving the allegations and reserved the right to pursue legal action.