'Unjustified and Solely Politically Motivated': Lokpal Dismisses Pleas Against ex-SEBI Chief Madhabi Buch

In a 116-page order, the Lokpal, headed by AM Khanwilkar, has dismissed complaints against former SEBI chairperson Madhabi Buch.

Madhabi Buch was accused of favouring the Adani Group of Companies when she was the SEBI chairperson.

“There is no foundation whatsoever for establishing even a prima facie case of corruption,” Lokpal said in its order while dismissing the pleas. It has further asked the complainants not to make public the oral and documentary evidence submitted in the proceedings.

Here are the 12 major points from the order:

1. Instant allegations are not continuous offences; completed when the alleged ‘undue advantage' occurred: The instant allegations are not in the nature of continuous violations as the essential ingredient of violations namely the alleged act of obtaining "undue advantage" completes the allegation of violation. The complainant has already argued in the affidavit that the alleged improper actions of SEBI are not part of the ingredients of the violation.

2. ESOPs from ICICI were granted pre-2011; complaint time-barred: Similarly, the allegation that the quid pro quo for the ICICI related actions of SEBI was the grant of ESOPs by ICICI is ineligible as a complaint before the Hon'ble Lokpal since the grant of ESOPs had been completed before 2011, when the RPS moved to Singapore. Thus the action by ICICI was completed before 2011 itself. The subsequent vesting and exercise of the ESOPs over the years in line with the ESOP scheme that was applicable to all ex-employees, and the sale of the shares in the market is not at all relevant for calculation of the period of limitation.

3. Both allegations fall outside Lokpal's 7-year limitation: Therefore, in both the cases the alleged offence was completed before 7 years from the date of complaint and thus cannot form the basis of a complaint before the Hon'ble Lokpal.

4. Two out of the five sets of cases fall outside the tenure of public service of the RPS: The Hon'ble Lokpal may also like to note that these two cases of alleged undue advantage also fall outside the tenure of service period of the RPS as a public servant. The PC Acts gets attracted only when the "undue advantage" is obtained during the tenure as public servant. In the Adani matter, the alleged undue advantage related to a period 2 years before the RPS became a public servant. In the ICICI Bank matters, more than 6 years before the RPS became a public servant.

5. Absence of regulatory failure held by Hon'ble Supreme Court negates quid pro quo allegation: It is submitted that, firstly, the allegation of corruption would have had to result in improper action i.e. regulatory failure for the "quid pro quo" to exist as alleged. Since the Hon'ble Supreme court has, after considering, the detailed Expert Committee Report, held that there was no regulatory failure in respect of the actions relating to the Adani investigations nor in respect to the FPI and LODR Regulations, the question of quid pro quo cannot arise. It is submitted that the findings of the Hon'ble Supreme court cannot be re-opened in the present proceedings to question the finding of the Hon'ble Supreme Court that there was no regulatory failure on the part of SEBI.

6. Newspaper reports not admissible: Evidence presented by the complainant must be legally admissible. Hearsay or speculative evidence is not acceptable for establishing a prima facie case under the Lokpal framework.Newspaper reports, being hearsay, do not constitute legal evidence. This principle is essential in ensuring that only verified and credible evidence supports complaints under the Prevention of Corruption Act.
7. This case is a clear example where no allegation of receipt or attempted receipt of undue advantage was made in the original affidavits submitted by the complainant. Only after the reply of the Responding Public Servant (RPS), which pointed out the absence of this important ingredient, did the complainant, without undergoing the signing of verified clause by filing affidavit, in the written submissions, make a belated express allegation.
8. The complainants have failed to even frame specific and valid allegations under the Prevention of Corruption Act (PCA) with the requisite legal ingredients of undue advantage or quid pro quo. As such, there is no foundation whatsoever for establishing even a prima facie case of corruption against RPS This raises an important question of real motivation behind filing such baseless complaints.
9. Malicious motivation of complainants: One complainant is affiliated with an organisation that appears to have illegally procured Income Tax Returns (TRs) of RPS, her husband, and Agora Advisory. These documents were used to fabricate allegations of corruption which were then publicised through press conferences and press releases, with the sole intention of discrediting SEBI's by waging a trial by media.The second complainant, too, has acted with similar mala fides. She went public on social media regarding the filing of her complainta clear and deliberate violation of the confidentiality requirements under the Lokpal Act. It appears that the complaint was filed solely with the intention of generating media attention and not with the bona fide objective of pursuing legitimate grievance redressal.

10. The complainants have approached the Hon'b Lokpal with unclean hands, and the complaints are liable to be dismissed on this ground alone.
11. One complainant appears to be attempting to gain access to confidential SEBI investigation records concerning the Adani matter despite the fact that the Hon'ble Supreme Court has already concluded and closed the matter. This is a blatant attempt to abuse of the Hon'ble Lokpal's process, undertaken with the sole objective of reviving an issue that has been conclusively adjudicated, purely for political reasons.
12. The remaining allegations made by the complainants clearly emerge asfabrications based on illegally obtained ITRs of RPS, her husband, and Agora Advisory. The complainants used the ITR information, illegally accessed details of TDS on payments to RPS, to reverse engineer a false narrative.

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