India market regulator chief says she complied with all required disclosures (updated)

Wockhardt

13/09/2024 10:31

* 
      Buch denies conflict of interest allegations from
Hindenburg and
Congress Party
    

        * 
      Buch says she recused herself from matters related to
ICICI
Bank, Mahindra Group, and Dr. Reddy's
    

        * 
      Government silent on opposition's allegations; Congress to
respond to Buch's statement
    

  
 (Adds details throughout; context)
    By Jayshree  P Upadhyay
       MUMBAI, Sept 13 (Reuters) - The head of India's market
regulator said on Friday she had complied with all disclosure
guidelines issued by the Securities and Exchange Board of India
(SEBI), rejecting allegations levelled by the country's main
opposition party and a U.S. short seller about a conflict of
interest.
    "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," Madhabi Puri Buch said in
what she called a personal statement.
    Buch has faced criticism from U.S. short seller Hindenburg
Research and India's opposition political parties about alleged
conflicts of interest in investigations related to the Adani
Group and other corporate entities.
    The wrangle is a rare instance of the head of a top Indian
regulator facing pressure to resign over alleged wrongdoing.
    In a report in August, Hindenburg, a forensic financial
research firm, alleged that Buch had previous investments in a
fund which was part of a network of funds used by Vinod Adani,
brother of billionaire Gautam Adani.
    SEBI is currently investigating alleged regulatory
violations by the Adani Group, and Hindenburg said Buch's
previous investments left her less than objective in steering
those investigations.
    Buch, in a previous statement, denied this.
    Hindenburg's report was followed by a series of allegations
by India's opposition Congress Party which is demanding an
investigation and Buch's resignation from SEBI, which oversees
listed companies and domestic and foreign investors.
    "The allegations made are false, incorrect, malicious and
motivated," Buch and her husband Dhaval Buch said in the
statement.
    In particular, Buch said, she has not dealt with any
regulatory matters related to her former employer ICICI Bank.
    
    CONSULTING FEES     
    The Congress party alleged that Buch had a conflict of
interest in dealings with ICICI, where she worked until 2011.
The bank denied this in a statement.
    The Congress said that Buch continued to earn an income from
ICICI Bank through employee stock options (ESOPs) when it was
being investigated by the regulator for market infractions.  
    "SEBI's guidelines permit board members, including the
Chairperson, to hold and transact in ESOPs," Buch's statement
said. 
    Buch's statement also denied allegations made by the
Congress about a conflict of interest with the Mahindra Group
and Dr. Reddy's due to consulting fees given by these groups to
Dhaval Buch.
    Madhabi Buch recused herself from matters related to these
companies, the statement said. 
    The consulting fees were earned through two entities, Agora
Partners and Agora Advisory, in which Madhabi Buch owns a 99%
shareholding. These advisories had continued to earn revenue
after Buch joined the regulator, taking on its second highest
post, in 2017, Reuters had reported.
    This was done to "transparently isolate" income from
companies earned by Dhaval Buch from his personal income and
expenses, the statement said. Buch added that all the
allegations made against her are based on her income tax returns
which have been obtained through 'fraudulent means and
illegally'. 
    The government has so far been silent on the opposition's
allegations. 
    An email sent to the federal Finance Ministry about a query
on plans to investigate Buch was not answered immediately.
    A Congress party spokesperson told Reuters it would respond
shortly to the assertions made in Buch's statement.


 (Reporting by Jayshree P. Upadhyay in Mumbai; additional
reporting by Shivangi Acharya in New Delhi
Editing by Mark Potter, Christina Fincher, William Maclean)
 ((mailto:Ira.Dugal@thomsonreuters.com; +91-9833024892;))