The Congress party has leveled serious accusations against Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (Sebi), alleging a conflict of interest due to her purported financial ties with ICICI Bank during her tenure at Sebi. The controversy erupted when Congress claimed that Buch, who has been with Sebi since 2017, received an income of ₹16.8 crore from ICICI Bank and its associated entities, a figure that reportedly dwarfs her official Sebi income of ₹3.3 crore during the same period by a factor of 5.09.
At a press conference held in Delhi, Congress leader Pawan Khera raised concerns over the integrity of Buch's position, asserting that it is highly irregular and legally questionable for a full-time member of Sebi to receive regular payments from a private entity, particularly one she was previously associated with. The accusations suggest that Buch continued to hold an office of profit with ICICI Bank and its holdings, despite her regulatory role, which the Congress argues is a blatant violation of Section 54 of Sebi's regulations.Â
Buch's career trajectory includes significant time at ICICI Bank, where she began her professional journey in 1989. She served as the CEO of ICICI Securities from February 2009 to May 2011 before eventually taking on the role of a whole-time member at Sebi in April 2017, a position she held until October 2021. In March 2022, Buch was elevated to the position of Sebi Chairperson, making her the first woman to lead India’s capital market regulator.
The controversy surrounding Buch's alleged conflict of interest is compounded by recent scrutiny of Sebi’s investigations into alleged securities law violations by the Adani Group, a case that has already attracted significant attention and controversy. Congress general secretary Jairam Ramesh has publicly questioned the impartiality of Sebi’s investigations, suggesting that the government may have overlooked potential conflicts of interest involving Buch. Ramesh’s comments reflect a broader concern within the Congress party that Buch’s financial ties to ICICI Bank could undermine the credibility of Sebi’s regulatory oversight, particularly in high-profile cases like the Adani Group investigation.
In response to these allegations, ICICI Bank issued a statement denying that Buch had received any salary or ESOPs (Employee Stock Ownership Plans) from the bank or its subsidiaries after her retirement, other than her retirement benefits. The bank clarified that any compensation Buch received during her employment was in line with standard policies, including salary, retiral benefits, bonuses, and ESOPs, which vested over several years and could be exercised up to 10 years from the date of vesting. The bank also noted that under Indian Income Tax rules, any perquisite income from exercising ESOPs is taxable, and the tax is duly reflected in the relevant financial documents.
These allegations by Congress are part of a broader narrative surrounding Madhabi Puri Buch, who has recently been the subject of another controversy following claims by US-based short-seller Hindenburg Research. The firm alleged that Buch and her husband, Dhaval Buch, were connected to offshore entities involved in the Adani money siphoning scandal. The Buchs have vehemently denied these allegations, stating that their investment in the fund in question occurred two years before Madhabi joined Sebi, and thus had no bearing on her regulatory duties.
Amidst these allegations, Buch made a public appearance at a Confederation of Indian Industry event on Monday, where she humorously remarked that while she could discuss investing in Real Estate Investment Trusts (REITs), she would likely face further accusations of conflict of interest. This comment was a pointed reference to Hindenburg Research’s claim that Buch had promoted REITs as a favored investment class at industry events after her husband joined Blackstone, a global investment firm, as a senior advisor in 2019.
The unfolding drama highlights the intense scrutiny faced by regulatory bodies and their leaders in India, especially when questions of integrity and impartiality arise. As the situation develops, it remains to be seen how the government and Sebi will address these serious allegations and whether any further action will be taken against Buch. The Congress party, meanwhile, continues to press for transparency and accountability, calling on Prime Minister Narendra Modi to clarify the criteria used for appointing heads of regulatory bodies like Sebi and to address the concerns raised by these recent controversies.
Â
