'Buch got rental income from entity affiliated with firm under SEBI probe'

The Congress on Friday hurled more conflict of interest allegations against SEBI chairperson Madhabi Buch and demanded to know why Prime Minister Narendra Modi was not acting against her.

Congress general secretary Jairam Ramesh alleged Buch got rental income from an entity affiliated with a company that the SEBI was investigating, including for insider trading.

‘Buch’s integrity in doubt’

Ramesh wanted to know how much more evidence was needed to show the collapse of transparency and integrity as far as the capital markets regulator was concerned.

"By the NSE's data, there are now 10 crore Indians with unique PANs who have some form of investment in this market. Don't they deserve better? Why does he (Modi) not move? What is he afraid of?" he said in a post on X.

Rental income from suspect firm

Congress spokesman Pawan Khera said that between 2018 and 2024, Buch -- as a whole-time member and later chairperson of the Securities and Exchange Board of India (SEBI) -- had been receiving rental income amounting to Rs 2.16 crore from "Carol Info Services Ltd", a company affiliated to Wockhardt Ltd.

Wockhardt Limited was being investigated by SEBI in 2023 for various cases, including for insider trading, he told the media.

Khera alleges corruption

Khera asserted that this was an outright case of corruption that invoked conflict of interest, violating sections 4, 7 and 8 of SEBI's 2008 code on conflict of interests for members of its board.

"The SEBI chairperson was appointed on March 2, 2022, by the Appointments Committee of the Cabinet, which the prime minister heads. Was her appointment cleared on the condition that she could maintain her previous financial relationships, provided she acted in line with the wishes of the prime minister and his close associates?" the Congress leader asked.

Previous SEBI heads

He said previous SEBI chairpersons went to great lengths to avoid even the appearance of a conflict of interest, both in their roles at SEBI and in their earlier positions.

"For instance, M Damodaran sold his 50 SBI shares when he took over UTI in 2001 and CB Bhave recused himself from all matters involving the National Securities Depository Ltd where he was formerly chairman. In contrast, Buch merely transferred her investments to her spouse, which raises concerns about credibility," Khera said.

Congress challenges Modi

He asked why there was no effort to verify whether Buch would follow these established standards. "Or was this lack of scrutiny part of a mutually beneficial arrangement?" Khera asked.

"If the head of the regulatory body is compromised, then that head becomes pliable. Perhaps that was the objective," the Congress leader said.

Buch asked to come clean

Khera said he was challenging the SEBI chief to come out and deny the charges against her.

The Congress had on Thursday demanded an independent inquiry into the matter, saying foreign investors were getting concerned and there were doubts about the integrity of India's stock markets.

Buch had denied the allegations as baseless and asserted that their finances were an open book.