Hindenburg’s SEBI bombshell: A new headache for Centre
After the Hindenburg Research expose, the SEBI Chairperson Madhabi Puri Buch’s continuance in the job is going to be a headache for the Narendra Modi government. The US-based research firm on Saturday exposed her and husband’s offshore finance and stock trading firms and their links with firms of Industrialist Gautam Adani and his brother Vinod Adani. A few hours after the expose, Madhabi Buch said she made disclosures to SEBI in this regard. Here the basic question is whether she disclosed to the government this information when she was considered for appointment in SEBI…
Securities and Exchange Board of India (SEBI) is a Regulator of Stock Exchanges. The Hindenburg Research Report clearly shows that Madhabi and her husband Dhaval Butch are actively involved in offshore finance firms involved in Indian Stock Exchange trading and the links of these offshore firms with the Adani brothers. No need to say much about the offshore funds based in tax havens, their trading in Indian Stock Exchanges, and their secretive mode of operations, while the common citizen is asked about all KYC norms regularly. Anyway, such a person involved in offshore funding is now the Regulator SEBI’s head. Modi government appointed her to SEBI as Whole Time Director in 2017 and later elevated her to Chairperson of SEBI in 2022. This was the first time a person from the private sector was considered for the top posts in SEBI. Otherwise, these top posts were handled by senior government officials.
Here are the questions:
- Why did the Modi government allow entry of a private person involved in stock trading in the stock exchange Regulator body SEBI?
- Did she disclose her involvement and her family members’ in offshore finance and trading firms? If she did and yet the government appointed her, that is a very serious issue.
- Will a person who belongs to a real estate firm be appointed in the real estate sector Regulatory body RERA? Will a person who worked in private airlines will be considered by the Regulatory body DGCA? Will a person involved with a private telecom operator be appointed to the Regulatory body TRAI?
Finance Ministry needs to clarify
SEBI’s nodal Ministry is the Finance Ministry. Had the Finance Ministry in 2017, raised Madhabi Buch’s involvement in offshore funds routing and trading business when considering her for appointment as Whole Time Director in SEBI? Had the Appointments Committee of Cabinet headed by Prime Minister Narendra Modi and Home Minister Amit Shah in consultation with Finance Minister considered these facts when Madhabi Buch was elevated as Chairperson of SEBI in 2022? Normally, the Intelligence Bureau will be asked to report on the credentials of persons considered for top jobs. In this case, are any such IB reports sought by the government?
The most unethical part of Madhabi Buch was to continue as SEBI Chairperson when the Supreme Court ordered an investigation by SEBI against Adani Group, based on the first expose of the Hindenburg Research Report on huge fluctuations in the Group’s shares. The latest Hindenburg Report clearly shows her and husband’s involvement in offshore funds and trading link with firms controlled by Gautam Adani and Vinod Adani. Her continuance as SEBI Chairperson is totally untenable now and the government must probe the murky deals in Stock Exchanges and the role of offshore funds and its trading and fluctuations.
Meanwhile, in February 2024, BJP leader Subramanian Swamy raised objections about the clash of interests of SEBI Chairperson Madhabi Buch in the Axis Bank – Max Life deal. At that time government kept quiet[1]. In essence, the government’s decision to appoint a private person, that too involved in offshore funds and Stock Exchange trading in the Regulatory body SEBI was totally wrong.
Reference:
[1] Axis Bank – Max Life deal: BJP leader Subramanian Swamy alleges conflict of interest against SEBI Chairperson Madhabi Puri Buch – Feb 28, 2024, PGurus.com
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Government should announce a JPC without delay. The members of PJC should have no conflict of interest, I.E. they or their party bosses should have no allegation, pending investigations or on bail. It will be very difficult or even impossible to find enough of members meeting these conditions.
If the conditions mentioned in the article are to be applied to the politicians we will just not have any politicians