Explain conflict of interest charges: Lokpal to SEBI chief

Contact Counsellor

CategoryPolity

Last Updated11/11/2024

Anti-corruption watchdog Lokpal on Friday (November 8, 2024) sought an explanation from the chief of India’s stock market regulator, Madhabi Puri Buch, on the conflict of interest charges levelled against her in three separate complaints that cited a recent report from the U.S.-based shortseller firm, Hindenburg Research.

On November 8, 2024, Lokpal, India’s anti-corruption body, requested an explanation from SEBI Chairperson Madhabi Puri Buch regarding conflict of interest allegations. These allegations stem from complaints that referenced a recent report by the U.S.-based shortseller Hindenburg Research.
The order, led by Lokpal Chairperson Justice A.M. Khanwilkar, is procedural, requiring Ms. Buch to submit an affidavit within four weeks. The Lokpal will review the matter further on December 19.

Allegations Against SEBI: Hindenburg Research had previously accused the Adani Group of financial malfeasance in early 2023 and alleged that SEBI’s investigation was compromised by a possible conflict involving its chairperson.
Public Response: SEBI, along with Ms. Buch and her husband, Dhaval Buch, responded with statements to clarify and deny the accusations from Hindenburg, dismissing them as “false, malicious, and motivated.”

Three complaints were lodged against Ms. Buch:
First Complaint: Filed on August 13, 2024, this complaint cited the Prevention of Corruption Act, seeking Lokpal action.
Subsequent Complaints: Two additional complaints were filed on September 11 and October 14, 2024, containing similar allegations of conflict of interest.
Lokpal’s Order: The order noted that, without making a judgment on the allegations, Ms. Buch is to provide an explanation for the complaints. Lokpal emphasized that only Ms. Buch, as the named public servant, would need to respond at this stage.

Clarifications from Complainants: On September 20, Lokpal asked the first two complainants to clarify certain issues. They responded with explanatory affidavits, providing further details.
Further Examination: Lokpal stated it would consider both the original complaints and these affidavits, focusing on the allegations' relevance to proceed with action under the Lokpal and Lokayuktas Act.

The complaints, including one by Trinamool Congress MP Mahua Moitra, alleged “quid pro quo arrangements” involving Ms. Buch, posing a potential national security risk. The Lokpal acknowledged that these were “serious personal allegations” and thus warranted a formal response from the SEBI chief.