The Wire Staff 
New Delhi: SEBI chief Madhabi Buch claimed that both of her consulting firms flagged in the latest Hindenburg Research report went “dormant” immediately after her appointment at the market regulator. However, that is not the case, statutory documents have revealed. One of the consulting firms also shares its address with its statutory auditor, Scroll has reported.
Two of Buch’s consulting firms – Agora Advisory, based in India, and Agora Consulting, based in Singapore – came into the limelight on August 10 when US-based short seller Hindenburg Research highlighted them as potential conflicts of interest with her role as SEBI chairperson.
The short seller has also reported that Madhabi, along with her husband Dhaval Buch, invested in controversial off-shore funds linked to the Adani siphoning scandal – an allegation that the Buch’s have not denied.
The Indian consulting firm was set up by Madhabi before she assumed the post of SEBI’s chairperson. According to documents from the Registrar of Companies, Agora Advisory was incorporated on May 7, 2013 with Madhabi as one of the two directors.
The firm’s incorporation certificate mentions its address as “201, RNJ Corporate, Next to Samrat Hotel, Jawahar Road, Ghatkopar (East), Mumbai”. This address is also mentioned on the firm’s latest balance sheets for the year 2023-’24, Scroll reported.
The auditor of Agora Advisory, a chartered accountancy firm called Shah and Savla LLP, is registered at the same address, according to its filings as well as its website.
According to the report, two other firms founded by Madhabi – Aarnaira Impact Solutions Private Limited and Aarnaira Development Foundation – also have the same address. She resigned from their boards before joining SEBI in 2017. Dhaval Buch has been a director in these firms since 2019.
A ground visit to the RNJ corporate building revealed that while Shah and Savla LLP have an office on the second floor, the guards of the building had not heard of Agora Advisory, the Scroll report said.
A statutory audit is a legally required review of the accuracy of a company’s financial statements and records. These audits are required to be conducted by third-party firms so as to maintain neutrality.
Shah and Savla have been Agora’s auditors since the financial year 2015-’16 at least, and in July 2024, their role was extended till the financial year 2028-’29, according to official documents.
According to experts cited by Scroll, a firm and its auditor sharing the same address was a “shady” and a “lazy” practice, usually restricted to the informal sector. “In the formal sector, it is usually a sign of bad corporate governance,” a faculty member at a prominent management institute told Scroll, on the condition of anonymity.
Such arrangements raise “questions about conflict of interest between the firm and the auditor, and about the independence of the auditor”, Amarjeet Chopra, a former president of the Institute of Chartered Accountants of India (ICAI) told the news portal.
Another Delhi-based chartered accountant, Pooja Madhan, said that white this may not necessarily be a red flag, it can lead to questions about other links. “Other connections like shared ownership, management control, or familial relationships could potentially compromise the auditor’s objectivity and independence, warranting closer scrutiny,” she said.
Madhan added that the ICAI code of ethics requires statutory accountants to protect their judgement from bias, conflict of interest or undue influence.
Agora Advisory reported nearly Rs 2 crore in revenue in FY22
The documents filed with the Registrar of Companies also revealed that Madhabi held 99% stake in Agora Advisory till as late as March 2024, even though Dhaval had replaced her as director in 2017.
The firm was active between 2019 and 2024 and had made Rs 3.63 crore in revenue from its operations, Scroll reported.
Hindenburg Research’s August 10 revelations also said that the firm had reported revenue of Rs 1.98 crore in 2021-’22, more than four times Buch’s salary as SEBI chairperson.
The Buchs in their statement has said that Dhaval had “started his own consultancy practice through these companies” after he retired from Unilever in 2019.
However, their claim of the firms becoming dormant after her appointment with SEBI did not hold up according to Agora Advisory’s statutory documents.
Most of the Rs 3.63 crore revenue between 2019 and 2024 was made between 2019 and 2022, when Madhabi was a whole-time member at SEBI, Scroll reported.
“What other investments or business has the SEBI chairperson engaged in through her husband’s name while serving in an official capacity?” Hindenburg Research had asked in response to Buch’s statement.
Congress announces nationwide protest
Upping the ante in light of the latest Hindenburg allegations, the Congress on Tuesday (August 13) announced a nationwide protest on August 22 demanding a Joint Parliamentary Committee (JPC) probe into accusations against the Adani group and Madhabi’s resignation.
The August 22 demonstrations will also include “gherao” at all Enforcement Directorate offices across states.
“The shocking revelations of a nexus between the SEBI and Adani needs a thorough investigation. The money of small investors in the stock market cannot be jeopardised,” Kharge said in a post on X after a meeting with all general secretaries, state unit chiefs and AICC state in-charges.
The Modi government must immediately seek the resignation of the SEBI chairperson and constitute a JPC in this regard, he said.