Congress makes fresh allegations against Madhabi Buch, asks if PM ‘is aware’

The Congress, which has levelled allegations of its own against SEBI Chairperson Madhabi Puri Buch after certain claims made by US-based short-seller Hindenburg Research, has upped the ante further by making some new disclosures.

The party on Saturday (September 14) claimed that Buch traded in listed securities while in possession of unpublished price-sensitive information and has been investing in Chinese firms at a time when India is facing geopolitical tensions with that country.

Investment in Chinese firms

“Is the PM [Narendra Modi] aware that the SEBI chairperson has been investing in Chinese firms at a time when India is facing geopolitical tensions with China,” Congress general secretary Jairam Ramesh asked in an X post.

Pointing to “fresh conflict of interest allegations” against Buch, Ramesh claimed that she, as a whole-time member and later as the SEBI chairperson, traded in listed securities worth Rs 36.9 crore between 2017 and 2023.

“Is the PM aware that Madhabi Buch has made high value investments outside India? If yes, what is the date of this investment and date of disclosure?” Ramesh asked.

Buch “traded in listed securities worth Rs 36.9 crore”

Addressing a press conference at the AICC headquarters in Delhi, Congress’s media and publicity department head Pawan Khera also raised the same questions.

Referring to Buch’s alleged trading in listed securities worth Rs 36.9 crore, Khera said, “This is in violation of Section 6 of the SEBI’s Code on Conflict of Interest for the Members of Board (2008).”

He also gave a year-wise break-up of the total trading in securities which in total amounted to over Rs 36.9 crore.

“When did Buch declare her foreign assets and to whom?”

In addition to that, Khera said, “We have information that between 2017 and 2021, Madhabi Buch held foreign assets. We hereby ask: When was the first time she declared the foreign assets and to which agency of the government? Is it true that Ms Madhabi P Buch was actively involved in Agora Partners PTE (Singapore) as she was a signatory to the bank account?” he said.

Listing the details of her investment in the US between 2021 and 2024, Khera claimed that she had invested in Vanguard Total Stock Market ETF (VTI), ARK Innovation ETF (ARKK), Global X MSCI China Consumer (CHIQ) and Invesco China Technology ETF (CQQQ).

“It is deeply concerning to learn that Madhabi Buch, the SEBI chairperson, has been investing in Chinese funds. When the Prime Minister of India can publicly give China a clean chit, it’s hardly surprising that a key regulatory figure is engaging in investments linked to China,” Khera said.

Buch’s defence

The Congress attack comes a day after Buch 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 Hindenburg Research charged her of not being motivated enough to act on allegations against the Adani Group due to conflict of interest — also addressed issues raised by the opposition Congress over receiving payments from her previous employer the ICICI Bank while being a whole-time member of the 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.

Khera recaps previous charges

At the press conference, Khera also recapped previous “conflict of interest” allegations levelled by the Congress against Buch. He pointed to the Congress’s earlier allegation that the current SEBI chairperson drew an income of Rs 16.8 crores from the ICICI Bank and ICICI Prudential in the form of salary, ESOPS, TDS on ESOPs, while also drawing a salary from the SEBI was brought to the forefront.

“Shockingly, the SEBI was also adjudicating complaints against the ICICI and its affiliates during this period,” he said.

In lieu of a clarification issued by the ICICI Bank, the Congress presented facts with regard to questions raised on “retiral benefits”, “ESOPs”, and “TDS on ESOPs”.

No response from ICICI after fresh salvo

So far, ICICI has not responded to our newly- presented facts, Khera said.

“We disclosed that Ms Madhabi P Buch rented her property to Carol Info Services Limited, an affiliate of Wockhardt Limited, between 2018-2024. Wockhardt has been under SEBI's investigation for cases, including that of insider trading,” he said.

“We exposed Ms Madhabi P Buch’s public lie that Agora Advisory Pvt Ltd became ‘immediately dormant’ upon her joining SEBI. She still holds a 99% stake in it, and the company has actively provided consultancy/advisory services, receiving Rs 2.95 Crores from six SEBI-regulated entities between 2016-2024,” Khera added.

Through their response, Dr Reddy’s Laboratories and Pidilite confirm that they made payments to Dhaval Buch via Agora Advisory Private Limited, the Congress leader said.

The payments from listed companies, which are regulated by the SEBI to Agora Advisory Private Limited violate Section 5 of Code on Conflict of Interests for Members of Board (2008), he said.

Questions to Mahindra & Mahindra

“Further, Mahindra & Mahindra must clarify whether they paid large sums to both Dhaval Buch personally and his joint consultancy, Agora Advisory Private Limited, in which Madhabi Buch holds a 99% stake. If yes, did Mahindra & Mahindra fail to conduct KYC and due diligence before transferring substantial public funds to Agora Advisory Private Limited?” he said.

“If Dhaval Buch was paid Rs 4.78 crores personally, they must also clarify the payment of Rs 2.59 crores to Agora Advisory Private Limited, a supposedly ‘dormant’ company,” Khera said.

The Congress’s allegations come weeks after Hindenburg Research launched a fresh broadside against Buch, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.

(With agency inputs)