New Delhi, Sep 13 (PTI) Sebi chairperson Madhabi Puri Buch on Friday said she had made all necessary disclosures and complied with recusal guidelines in dealing with companies such as Mahindra Group that hired her husband, as she rejected allegations of impropriety as “false, malicious and motivated”.
Buch and her husband Dhaval Buch in a joint statement — the second since US-based short seller Hindenburg Research charged her of not being motivated enough to act on allegations against Adani group due to conflict of interest — also addressed issues raised by opposition Congress over receiving payments from her previous employer ICICI Bank while being a whole time member of Sebi.
The statement said Buch never dealt with any file involving Agora Advisory and Agora Partners — the advisories where she held 99 per cent and continued to earn revenue even after she joined the market regulator body Sebi in 2017.
According to the statement, she never handled files involving the Mahindra Group, Pidilite Industries, Dr Reddy’s Laboratories Ltd, Alvarez and Marsal, and Sembcorp — the firms that had employed her husband at some time during her stint at Sebi — as also that pertaining to her previous employer ICICI Bank at any stage after joining the regulator.
The payments that she got from ICICI Bank while being in Sebi pertained to contributory annuity scheme and exercising of ESOPs at various stages over 10 years.
“Sebi’s guidelines permit board members, including the Chairperson, to hold and transact in ESOPs,” Buch’s statement said.
While Hindenburg had alleged that the Buchs had previous investments in a fund that was part of network of funds used by two Adani associates to round-trip money and inflate group stock prices, the Congress alleged conflict of interest in dealings with ICICI, where she worked until 2011, as well as with Mahindra Group and four other companies due to consulting fees given by them to her husband Dhaval Buch.
“We are upright and honest professionals and have led our respective professional lives with transparency and dignity,” the couple said, describing their work record as “unblemished” and that they will demolish all “motivated allegations even in future”.
Securities and Exchange Board of India (Sebi) had faced questions over the delay in concluding the investigation into allegations against Adani Group.
“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,” Sebi chairperson and her husband Dhaval Buch said in a six-page joint statement.
Terming the allegations completely “false, malicious and defamatory”, Buchs said there is a clear pattern emerging to “distort and twist the facts” and hinted at taking appropriate legal actions.
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.
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.
“… 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,” Buchs said.
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.
Calling 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.
With regards to 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.
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”. PTI ANZ SP JD CS HVA
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