'Conflict Of Interest' To 'Toxic Culture': Four Major Allegations Against SEBI Chief Madhabi Puri Buch
SEBI Scandal: The controversy, which began with accusations against Madhabi Puri Buch and her husband, Dhaval Buch, in connection with Adani Group, has snowballed into a series of serious charges
SEBI Scandal: The pressure on SEBI Chairperson Madhabi Puri Buch has escalated as fresh allegations continue to emerge, following initial claims made by American short-seller Hindenburg Research. The controversy, which began with accusations against Buch and her husband, Dhaval Buch, in connection with Adani Group, has snowballed into a series of serious charges.
Hindenburg Research Allegations
In August, Hindenburg Research alleged that the SEBI chairperson and her husband held stakes in funds involved in the alleged siphoning of money by Adani Group. The report, released on August 10, 2024, suggested that the couple owned shares in Mauritius and Bermuda funds implicated in the scandal. Additionally, it claimed that Buch did not disclose her actual earnings, asserting that she made significantly more through a consultancy firm in which she held a majority stake than through her official SEBI salary.
In response, the Buchs vehemently denied these allegations, calling them baseless. The couple said that all necessary disclosures had been made to SEBI.
Subhash Chandra's Accusations
Adding to the turmoil, Subhash Chandra, Chairman Emeritus of Zee Entertainment Enterprises Ltd (ZEEL), leveled fresh allegations against Buch on Monday. Chandra accused the SEBI Chairperson of corruption and announced that he would cease cooperation with the capital markets regulator. He also hinted at taking legal action against Buch and urged other corporate entities to join his cause.
Chandra claimed that Buch's alleged bias against him played a significant role in stalling the Zee-Sony merger, which he argues should have been in the interest of minority shareholders. He further accused Buch of being involved in corrupt practices with former ICICI Bank CEO Chanda Kochhar, asserting that illegal payments were made to Buch.
SEBI has yet to officially comment on the growing list of allegations. However, a source close to the matter dismissed Chandra's accusations as "malicious," stating that the facts would tell a different story. As the situation continues to evolve, the integrity of SEBI and its leadership remains under intense scrutiny, with the potential for significant implications for India's financial regulatory landscape.
Congress Party Weighs In
In September, the controversy deepened with new allegations from the Congress party. The party claimed that Buch received salary and ESOP payments from ICICI Bank during her tenure from 2017 to 2024, which exceeded her official compensation as a SEBI employee. ICICI Bank clarified that the payments were related to Buch's retirement benefits from her time with the lender. However, the Congress party questioned the legitimacy of these payments, raising concerns over their frequency and amount.
Internal Grievances and Staff Discontent
The Economic Times has also reported on an internal letter sent to the finance ministry, alleging a toxic work environment under Buch's leadership at SEBI. The letter, penned by SEBI employees, criticised the chairperson's management style, citing incidents of public humiliation, verbal abuse, and excessive monitoring of employee movements.
The letter claims that fear has become a driving force within SEBI over the past few years, with senior management allegedly neglecting best practices in leadership and employee motivation. The authors of the letter have called for an end to what they describe as a culture of intimidation.
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