U.S. short seller firm Hindenburg Research has questioned Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch’s silence after the Congress on Tuesday (September 10) alleged that she held 99 per cent shares in a consultancy firm, Agora Advisory Private Limited that was “actively providing advisory/consultancy services till date”.
The Congress also alleged that her husband Dhaval Buch, received Rs 4.78 crore from Mahindra and Mahindra during 2019-21 while the SEBI was adjudicating a case of the company.
Addressing a press conference in New Delhi, Congress spokesperson Pawan Khera said that the revelations show conflict of interest by Buch in violation of the SEBI code of conduct.
“Section 5 of the SEBI code clearly states that conflict of interest comes up when you earn from a company which is being investigated or under SEBI’s radar. Madhabi Buch earned Rs 2.95 cr through Agora and it is in front of you. Most of the money in this, 88 per cent, came from Mahindra & Mahindra,” said Khera.
“Madhabi Buch has 99 per cent shareholding of Agora and this company is hers and her husband’s. Madhabi Buch’s husband Dhaval Buch got Rs 4.78 crore from Mahindra & Mahindra company between 2019-21. And when is all this time happening? When Madhabi Buch was a whole time member of SEBI. This is a violation of Section 11 of the SEBI code of conduct,” he added.
Khera said that Agora Advisory Private Limited had provided services to five other companies apart from Mahindra and Mahindra, including Dr Reddy’s, Pidilite, ICICI, Sembcorp and Visu Leasing and Finance while Buch was working first as a full-time member of SEBI and later as chairperson.
Three of these entities – Mahindra & Mahindra, Pidilite Industries, Dr Reddy’s Laboratories – disclosed that they had hired Dhaval Buch as consultant or leadership coach during various periods and paid remunerations, reported The Indian Express.
Last month, Reuters cited public documents from India’s Registrar of Companies and reported that Buch’s 99 per cent shareholding in Agora Advisory Private Limited earned Rs 3.71 crore in the seven years since she became a whole-time member of SEBI potentially violates the market regulator’s conflict of interest policy.
On August 10, Hindenburg Research – whose report on the Adani group last year alleged price rigging of company shares – accused Buch and her husband of having held “stakes in both the obscure offshore funds used in the Adani money siphoning scandal,” citing “whistleblower documents”.
In its August 10 report, Hindenburg also said Buch was a 100% shareholder in a Singapore-based consultancy company called Agora Partners until as recently as March 16, 2022 – two weeks after she became SEBI chair – when she transferred her stake to her husband. Buch set up both Agora Advisory and Agora Partners before she joined SEBI as a whole-time member in 2017.
In her response to Hindenburg’s report, Buch and her husband Dhaval said both Agora Advisory and Agora Partners “became immediately dormant on her appointment with SEBI”.
“These companies (and their shareholding in them) were explicitly part of her disclosures to SEBI,” Buch and her husband said on August 11.
Hindenburg says no details available for Singapore-based consulting entity
Following the Congress’ allegations on Tuesday, Hindenburg Research in a statement on X on Wednesday said that while the allegations apply to Buch’s Indian entity, no details are available on her Singapore-based consultancy entity.
New allegations have emerged that the private consulting entity, 99% owned by SEBI Chair Madhabi Buch, accepted payments from multiple listed companies regulated by SEBI during her time as SEBI Whole-Time Member.
The companies include: Mahindra & Mahindra, ICICI Bank, Dr.…
— Hindenburg Research (@HindenburgRes) September 11, 2024
“New allegations have emerged that the private consulting entity, 99% owned by SEBI Chair Madhabi Buch, accepted payments from multiple listed companies regulated by SEBI during her time as SEBI Whole-Time Member,” Hindenburg said in its statement.
“The companies include: Mahindra & Mahindra, ICICI Bank, Dr. Reddy’s and Pidilite. These allegations apply to Buch’s Indian consulting entity with no details thus far on Buch’s Singapore-based consulting entity. Buch has maintained her complete silence for weeks on all of the emerging issues,” said the statement.
Meanwhile the Congress has demanded to know whether prime minister Narendra Modi was aware that Buch owns 99 per cent of Agora Advisory Private Limited and is receiving significant fees from listed entities, including Mahindra & Mahindra, and of her ties with a conflicting entity.
