Sebi chief denies Congress' allegations; terms them incorrect, motivated

New Delhi: Sebi chief Madhabi Puri Buch and her husband Dhaval Buch on Friday denied a series of allegations of impropriety and conflict of interest levelled by the Congress, saying these are "incorrect, motivated and defamatory".

In a point-by-point rebuttal of the accusations against them, Buchs said there is a clear pattern emerging to "distort and twist the facts" and hinted at taking appropriate legal actions.

In a joint statement, they said the allegations rely on illegally-obtained tax information, violating privacy laws and are being made in instalments, only to "keep the pot boiling".

"If the objective had been to arrive at the truth rather than to malign individuals and institutions with distortions of facts, we wonder why all allegations would not be brought out, in public, at one go. We would then have given all the facts at one go," Buchs said in a six-page statement.

The statement comes in the backdrop of the Congress making a series of allegations of impropriety against Madhabi Puri Buch including receiving income from ICICI Bank post-retirement, earning rental income from Wockhardt Associates. Besides, the political party made accusations against consulting assignments of Dhaval Buch and his companies -- Agora Advisory in India and Agora Partners in Singapore.

Dhaval Buch was accused of earning Rs 4.78 crore from Mahindra Group at a time when the regulator was investigating it for market infractions.

Terming the questions raised regarding the consulting assignments of Dhaval Buch and the firms as unfortunate, the statement said Dhaval is an engineer from IIT Delhi with 35 years of experience, including as an Executive Director on the Board of Hindustan Unilever, and has a "strong reputation" as a leading professional.

"There seems to be an assumption that when a spouse of a senior government official is appointed as an advisor, it must be attributed to factors beyond professional merit. Such assumptions overlook the strength of qualifications and expertise and reach conclusions that are most unfortunate," the statement noted.

Calling themselves as upright and honest professionals, Buchs said they have led their respective professional lives with transparency and dignity, earning an unblemished record.

Going by the statement, Dhaval started working with Mahindra & Mahindra in 2019 much prior to Madhabi being appointed as chairperson of Sebi.

With respect to allegations concerning the exercise of Employee Stock Options (ESOPs) received from ICICI Bank, the statement said that employees (like Madhabi) who retired were allowed to exercise their vested options for up to 10 years as against three months for those employees who resign.

On allegation of uneven nature of pension amounts, Buchs said these were part of a contributory annuity scheme and relates to exercise of ESOPs at various stages over 10 years.

On allegations regarding holding ESOPs while serving at Sebi, Buchs said that Sebi's guidelines permit board members, including the chairperson, to hold and transact in ESOPs. Moreover, she has never dealt with any files related to the ICICI Group of companies during her tenure.

In respect of allegations of moonlighting while employed with ICICI Bank, the statement said that Madhabi did not engage in any unauthorised external employment while working at ICICI Bank.

It has been alleged that Agora Advisory had provided services to two more companies - Sembcorp and Visu Leasing - while Madhabi was a Whole Time Member (WTM) of Sebi, the statement called them "patently false". These assignments were concluded and income accrued in 2016-2017, before Madhabi even joined Sebi.

Since 2017, when Madhabi joined Sebi as a Whole Time Member, she had disclosed the fact of her shareholding in Agora Advisory as well as in Agora Partners, the statement noted.

"In keeping with the highest standards of governance, Madhabi has never dealt with any file involving Agora Advisory, Agora Partners, the Mahindra Group, Pidilite, Dr Reddy's, Alvarez and Marsal, Sembcorp, Visu Leasing or ICICI Bank at any stage after her joining Sebi.

"... the allegations are completely false, malicious and defamatory. Madhabi has complied with all the disclosure and recusal guidelines of Sebi, and in fact, maintained a proactive continuing recusal list with Sebi over and above the requirements under the guidelines ," the statement noted.

On the allegation of rental income received from a property owned by Madhabi and Dhaval, the duo said that the property was leased out in the normal course. As it turned out subsequently, the lessee happened to be an associate of Wockhardt, a listed company which had come under investigation.

"Madhabi has not dealt with any files related to Wockhardt," Buchs said, adding that Sebi operates under a clear and well-defined delegation of powers, ensuring that investigations are handled in accordance with established procedures.

For investigations, various powers are vested in senior officials such as Chief General Managers, Executive Directors, or Whole-Time Members and "no investigation files go to the Chairperson", they added.

Buchs said the allegations made against them are "false, incorrect, malicious and motivated and the only intention is to "build a false narrative".

Earlier this week, US-based short seller Hindenburg Research questioned Sebi chief's "complete silence" on fresh allegations of impropriety, conflict of interest and accepting payments from companies while serving as a member of the market regulator.

Hindenburg, which had in January 2023 accused Adani Group of using tax havens to sidestep local market regulations, had last month alleged that Buch's previous investments and dealings may be behind the slow probe against the conglomerate.