SEBI's Madhabi Buch fails to appear before PAC meeting; what happens now?
PAC may summon her again; if Buch skips next summons too, PAC chief can hold her in contempt and recommend case to Parliament's Committee on Privileges for inquiry
Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch, who has been in the eye of the storm over allegations of financial irregularities, stirred up a political storm when she failed to appear before the Parliament’s Public Accounts Committee (PAC) on October 24.
Just hours before the PAC meeting was to start Buch sent a letter expressing her inability to attend due to 'personal exigencies'.
The PAC meeting on October 24 had been scheduled to take oral evidence from SEBI officials, including Buch, on the performance of the market regulator, as part of the panel's decision to review the performance of regulatory bodies, suo moto, as an agenda.
Opposition MP members in the PAC had been gearing up to question Buch's actions in relation to the conflict-of-interest allegations against her, especially regarding investigations involving the Adani Group.
Notably, the Opposition has been demanding for a parliamentary probe into Hindenburg Research’s allegation that Buch and her husband, Dhaval Buch, had “stake in obscure offshore entities used in Adani money siphoning scandal'.
Contempt of legislative body?
When Buch failed to show up before the committee, PAC chairperson and Congress leader K C Venugopal immediately adjourned the meeting.
Venugopal said while Buch’s non-appearance could be seen as contempt of a legislative body, the PAC decided to overlook the incident, considering certain factors, including her being a woman. However, she is expected to appear before the PAC at a future date.
Another Opposition member, however, pointed out that Buch’s conduct of skipping the meeting amounted to 'contempt' of the parliamentary panel.
Venugopal also said that Buch had earlier sought an exception from appearing before the PAC, but that request was denied. After which she had confirmed her and her officials’ presence in the committee.
Also read: Congress makes fresh allegations against Madhabi Buch, asks if PM ‘is aware’
What happens next?
According to political observers, the PAC, which directly cannot take any action against Buch, can summon her again. On that date, she may be asked to explain the reason for skipping the previous deposition.
Though, she has cited personal exigency Buch has not explained the nature of the exigency. And convention demands that a summons by any parliamentary committee must be treated with priority. If the explanation is not satisfactory, she may be asked to tender an apology to the committee.
In the eventuality, Buch skips the next summons too, the PAC chairman can hold her in contempt and recommend the case to the Parliament's Committee on Privileges for an inquiry. The Privileges Committee will then investigate, call her for an explanation and give its recommendations.
Theoretically, if the Privileges Committee finds it to be a fit case of contempt/breach of privilege, it can recommend any punishment, including imprisonment. The report then has to be tabled in Lok Sabha and the House will decide through a vote what the punishment should be.
Also read: Congress accuses Madhabi Buch of drawing '₹16.8 crore ICICI salary' while being at SEBI
BJP MPs slam summons
However, some BJP MP members had been totally against the PAC’s decision to summon Buch.
Former Union minister and BJP MP Ravishankar Prasad led a group of NDA MPs questioning Venugopal's unilateral decision to set the agenda and summon Buch. These MPs also met the Lok Sabha speaker to raise the issue with him.
However, political analysts pointed out that the BJP's argument that calling Buch was not the committee's decision does not hold as the PAC Chairman has the power to ask anyone to depose. There is no requirement under parliamentary rules for putting to vote in the committee who can or cannot be summoned for a deposition.
In BJP's view, the function of the Committee is only to scrutinise the appropriation accounts of the Government of India and reports of the Comptroller and Auditor General of India.
If there is a dispute among members on who should depose, the matter can be raised with the Lok Sabha Speaker, which is what Ravi Shankar Prasad has done. The Speaker can then examine whether the deposition is necessary or not to complete the committee's inquiry and then give his ruling on the matter.
Role of PAC
The PAC reports to Parliament to ensure executive accountability. It reviews funds sanctioned by Parliament, scrutinizes the government’s annual finance accounts, and examines other relevant matters. The ministries and government bodies are required to act on PAC recommendations, which are later presented as 'action taken reports' to Parliament.
Congress allegations
The Congress party has alleged that Buch earned consultancy fees from listed companies including Mahindra & Mahindra Ltd, Pidilite Ltd and Dr Reddy's Laboratories Ltd, raising conflict-of-interest questions for the chair of Sebi. It also alleged that she has been deriving an income from ICICI bank while being employed at Sebi.
Given the power SEBI’s decisions hold over stock markets, according to business reports, the PAC was likely to question Buch on the disclosure obligations for senior officials in regulatory bodies. The Buchs and the Adani group have strongly denied these allegations.
In a post on X, Congress leader Rahul Gandhi asked why Buch is reluctant to answer questions before the PAC of Parliament.
"Who is behind the plan to protect her from being answerable to the PAC?" Rahul asked.
According to business analysts, SEBI chairperson's absence at this pivotal meeting has once again raised the important issue of the need for a stronger regulation of India’s financial markets.