Madhabi Buch, the chief of the Securities and Exchange Board of India, continued to earn revenue from her consultancy firm during her seven-year term in the markets regulator, potentially breaching rules for regulatory officials, Reuters reported. American short-seller Hindenburg Research had flagged in its report on August 10 that Buch had set up two firms before she joined SEBI: Agora Partners, an offshore Singaporean consulting firm, and an Indian consulting business, Agora Advisory.
In her response to the report, Buch and her husband Dhaval claimed that the two firms had become “immediately dormant” on her appointment as a member of SEBI. “These companies were explicitly part of her disclosures to SEBI,” the Buchs said in their statement on August 11.
Madhabi Buch had joined SEBI in 2017 and was appointed as its chief in March 2022. According to a 2008 SEBI policy, officials of the markets regulator are prohibited from holding an office of profit, receiving salary or professional fees from other professional activities, Reuters reported.
According to the documents cited by the Reuters, Agora Advisory Pvt Ltd in which 99 per cent shares are held by Madhabi Buch, earned Rs 37.1 million in seven years. Buch’s holdings potentially breaches the 2008 SEBI policy, adds the report. It showed that even though she had stepped down as the director of the firm in 2017. Her husband, Dhaval Buch, had replaced her.
Buch in her statement said the consultancy firms had been disclosed to SEBI and that her husband used these firms for his consulting business after retiring from Unilever in 2019.
Buch and the SEBI spokesperson did not immediately respond to emails seeking comment.
Hindenburg, citing Singapore company records, stated that Buch transferred all her shares in Agora Partners to her husband in March 2022. However, according to company records for the financial year ending March 2024, Buch still holds shares in the Indian consulting firm.
The documents, reviewed by Reuters, do not detail the business undertaken by the consultancy nor is there any available information to suggest these revenues had any link to the Adani Group.
Subhash Chandra Garg, a former top bureaucrat in the Indian government and a SEBI board member during Buch’s tenure, described her equity in the firm and its continued business operations as a “very serious” breach of conduct.”There was no justification for her to continue to own the firm after she joined the board. She could not have been allowed even after making disclosures,” Garg said.
“This makes her position completely untenable at the regulator.”
Buch has not clarified whether she was granted a waiver to retain her shareholding in the Indian consulting firm. A specific query to her on this was also not answered.Hindenburg’s allegations have led to calls for Buch’s resignation, including from opposition leaders.
