PAC Summons SEBI Chief Amid Hindenburg Allegations, Regulatory Review
Image Soure: Business Today
The Public Accounts Committee (PAC), a parliamentary body responsible for auditing government expenditure and scrutinizing the effectiveness of government departments and regulatory bodies, has summoned Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (SEBI), to appear on October 24, 2024. This is part of a broader examination of SEBI’s performance as a regulatory body. However, there is significant attention on the Hindenburg Research allegations regarding Buch and her husband, Dhaval Buch, allegedly having a “stake in obscure offshore entities used in the Adani money siphoning scandal.”
Both Madhabi Puri Buch and her husband issued a joint statement refuting these allegations. They clarified that “the investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore, and almost two years before Madhabi joined SEBI, even as a Whole Time Member.” She became a Whole Time Member at SEBI in 2017 and its Chairperson in March 2022.
“SEBI has strong institutional mechanisms of disclosure and recusal norms as per the code of conduct applicable to its officers. Accordingly, all disclosures and recusals have been diligently followed, including disclosures of all securities held or subsequently transferred,” the joint statement stated. The Adani Group has dismissed the Hindenburg allegations as “malicious, mischievous, and manipulative.”
The PAC, headed by senior Congress leader K. C. Venugopal, has already put out the agenda for the first half of its October 24 meeting: “Briefing by Audit followed by Oral evidence of the representatives of Ministry of Finance (Department of Economic Affairs) and Securities and Exchange Board of India (SEBI) on the subject, ‘Performance Review of Regulatory Bodies established by Act of Parliament.’ Oral evidence of the representatives of the Ministry of Communications, Department of Telecommunications, and Telecom Regulatory Authority of India on the subject, ‘Performance Review of Regulatory Bodies established by Act of Parliament.’”
Members of the BJP within the PAC have raised concerns over summoning Buch. They argue that the PAC’s jurisdiction is limited to examining the performance of regulatory bodies in managing public finances. Since the allegations against Buch are related to her personal conduct, not SEBI’s financial management, the BJP members claim this is beyond the PAC’s mandate. BJP sources also maintained that the allegations levelled were against an individual, not SEBI.
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