The Lokpal on Wednesday exonerated former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch from graft allegations connected to the Hindenburg Research report. The anti-corruption ombudsman stated that the charges were “untenable, unsubstantiated, and bordering on frivolity.”
In its ruling, the Lokpal concluded that, based on the evidence presented and relevant legal principles, the complaints lacked merit and failed to establish any cognisable offence or valid grounds to initiate an investigation against Buch.
The allegations stemmed from serious accusations of financial misconduct and conflict of interest, initially raised by U.S.-based short-seller Hindenburg Research and echoed by the Indian National Congress. The controversy gained traction in August 2024, when Hindenburg released a report claiming that whistleblower documents implicated Buch and her husband in offshore entities allegedly used in what the firm described as the “Adani money siphoning scandal.”
Key Allegations Examined
1. Promotion of REITs and Blackstone Link: One of the central charges brought forth by the Congress party was that Buch, during her tenure as SEBI chairperson, pushed for the promotion of Real Estate Investment Trusts (REITs), a move they claimed benefited Blackstone, a global investment firm associated with her husband. The opposition alleged this amounted to a conflict of interest and misuse of office to favour a private entity.
2. Undisclosed ICICI Bank Income: Another accusation focused on alleged non-disclosure of income from Buch’s previous employment at ICICI Bank. It was alleged that she had failed to properly report financial benefits post-retirement. However, the government’s investigation found no evidence of illegal transactions and confirmed that Buch had paid all her tax dues. ICICI Bank also issued a clarification, stating that Buch had not received any salary or ESOPs after her retirement in October 2013—only standard retirement benefits as per industry norms.
3. Internal Complaints on Work Culture: A third front emerged when SEBI employees submitted letters to the Ministry of Finance, alleging a toxic work culture under Buch’s leadership. Staff grievances included complaints of harsh behaviour, name-calling, and a demoralising environment. These concerns raised alarms within both SEBI and the government.
Following the complaints, the government intervened, held discussions with concerned employees, and advised SEBI's top management to adopt a more sensitive approach towards staff welfare. According to government sources, the unrest among staff may be attributed to the structural reforms initiated by Buch, who is credited with implementing sweeping changes aimed at increasing transparency and accountability within the regulator. Her reformist stance reportedly faced internal resistance.
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