Sebi chief earns Rs 37.1 million from her consultancy firm, possibly in violation of regulator's rules: report
According to the 2008 SEBI policy, officers of the market regulator are prohibited from holding positions of profit, receiving salary or professional fees from other professional activities.
Securities and Exchange Board of India chief Madhabi Buch continued to receive revenue from her consultancy firm during her seven-year tenure at the market regulator, potentially violating rules for regulators, Reuters reported. American short-seller Hindenburg Research had flagged in its report on August 10 that before joining SEBI, Buch had set up two companies: Agora Partners, an offshore Singapore consulting firm, and an Indian consulting business, Agora Advisory.
In her response to the report, Buch and her husband Dhawal claimed that both companies had become “immediately inactive” following her appointment as a member of SEBI. “These companies [and her shareholding in them] This was clearly part of her disclosures to SEBI,” Buchs said in its August 11 statement.
Madhabi Buch joined SEBI in 2017 and was appointed as its head in March 2022. According to a 2008 SEBI policy, officials of the market regulator are prohibited from holding office of profit, receiving salary or professional fees from other business activities, Reuters reported. .
According to documents cited by Reuters, Agora Advisory Private Limited, in which Madhabi Buch owns 99 percent, earned Rs 37.1 million over seven years. Butch's holding potentially violates the 2008 SEBI policy, the report adds. Although she stepped down as director of the firm in 2017, her husband Dhaval Buch replaced her.
Butch said in her statement that the consulting firms were disclosed to SEBI and that her husband used these firms for business advice after retiring from Unilever in 2019.
Butch and Sebi spokespeople did not immediately respond to emails seeking comment.
Hindenburg, citing Singapore company records, said Buch transferred all her shares in Agora Partners to her husband in March 2022. However, according to the company's filings for the fiscal year ended March 2024, Buch still holds shares in the Indian consulting firm.
The documents reviewed by Reuters did not provide details of the business carried out by the adviser, nor was there any information suggesting the income had any connection to the Adani group.
Subhash Chandra Garg, a former top bureaucrat in the Indian government and a member of the Sebi board during Buch's tenure, described her equity in the firm and her ongoing business operations as “very serious” code of conduct violations.” There was no justification for her. Maintain ownership of the firm after she joins the board. She could not have been given permission even after disclosure,” Garg said.
“This makes her position at the regulator completely untenable.”
Butch did not clarify whether she was exempted from retaining her stake in the Indian consultancy. Even one of her specific questions about this was not answered. Hindenburg's accusations led to calls for Buch's resignation along with opposition leaders.
