Finance Minister Nirmala Sitharaman Responds to Opposition's Allegations on SEBI Chairperson Amid Controversy

Baby Chakraborty, KalimNews, 17 September 2024, New Delhi : Union Finance Minister Nirmala Sitharaman addressed a press conference on Monday, offering a robust defense against allegations raised by the opposition Congress regarding payments received by SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, during her tenure. The controversy, which was fueled by a complaint from US-based short-seller Hindenburg Research, claims a conflict of interest involving Buch and her prior associations with ICICI Bank and Agora Advisory.

At the heart of the controversy are claims that Madhabi Buch failed to adequately address allegations against the Adani Group, with the opposition suggesting potential conflicts of interest as a result of her past affiliations. Congress spokesperson Pawan Khera, speaking at the All India Congress Committee (AICC) headquarters, alleged that between 2017 and 2023, Buch and her husband received substantial disbursements from her former employer, ICICI Bank. Khera also accused her of violating Section 6 of SEBI's Code on Conflict of Interest, 2008, by trading in listed securities worth ₹36.9 crore while serving as a whole-time member of SEBI and later as its chairperson.

Khera presented a year-wise breakdown of the securities transactions, questioning why Buch had not disclosed foreign assets during her tenure. He specifically alleged that Buch held significant stakes in Agora Partners Pte, Singapore, while being actively involved in its operations, including serving as a signatory on the company's bank accounts.

Finance Minister Sitharaman, in her first public response to the controversy, dismissed the allegations as politically motivated and baseless. She emphasized that both Madhabi Buch and her husband Dhaval Buch had already provided full and transparent explanations regarding the claims made against them. Sitharaman expressed confidence in the integrity of the SEBI chairperson, stating that Buch had maintained clear boundaries in her professional conduct and had complied with all regulatory requirements.

“The Buchs have given a detailed explanation, and their clarification is on record. The allegations raised are nothing but an attempt to undermine the credibility of one of India’s most trusted financial regulatory bodies. There is no evidence of misconduct, and the opposition’s narrative is speculative at best,” Sitharaman said at the press briefing.

Addressing Congress's concerns regarding payments from ICICI Bank, Sitharaman clarified that these were legitimate compensations related to Buch's previous employment and had been declared in accordance with the law. She also defended Buch’s management of Agora Partners, asserting that Buch had voluntarily recused herself from any SEBI-related files or cases involving her former companies, including Agora Advisory and Agora Partners, ensuring there was no conflict of interest.

The issue gained momentum after a report from Hindenburg Research, which had earlier sparked a major controversy with its accusations against the Adani Group. The report suggested that Buch's past connections to Agora Advisory, a company in which she holds a 99% stake, may have influenced her handling of sensitive cases, particularly those involving Adani. The opposition seized on this, suggesting that Buch's previous financial dealings compromised her ability to act impartially as SEBI Chairperson.

Sitharaman, however, refuted these claims, stating, "There is absolutely no conflict of interest. SEBI is an independent regulator and has always functioned with complete autonomy. The chairperson has acted within the legal framework, and these allegations are attempts to divert attention from real issues."

The Congress party, led by Pawan Khera, has demanded a thorough investigation into Buch's financial transactions and foreign asset declarations. Khera also raised questions about Buch's involvement in Agora Partners, asking why she continued to manage her stake in the company even after assuming a regulatory role at SEBI.

“This is not just about numbers; this is about transparency and conflict of interest. The people of this country deserve to know why a person holding a crucial regulatory position was allowed to trade in securities worth over ₹36.9 crore. Additionally, we ask: when were her foreign assets first declared to the government, and why was she a signatory on a foreign bank account while holding office?” Khera questioned during his press conference.

The opposition's attack on Buch comes amid a broader political battle over governance and transparency in financial regulation, particularly in the wake of the Adani Group controversy.

With the controversy gaining traction, the political landscape is heating up as both the ruling government and the opposition use the issue to their advantage. While Sitharaman’s defense of Madhabi Buch has temporarily silenced some critics, the Congress party continues to push for a full investigation, indicating that the matter is far from resolved.

For now, the Finance Ministry stands firmly behind SEBI’s leadership, portraying the opposition’s allegations as part of a larger political agenda. However, the ongoing scrutiny of Buch’s financial dealings and her role in managing regulatory matters will likely keep the issue alive in the coming weeks.

As the situation unfolds, it remains to be seen whether the opposition’s demands for an inquiry into the conduct of SEBI’s top official will lead to further political and regulatory fallout. For now, Buch remains at the helm of SEBI, navigating both professional challenges and political turbulence.