Sebi chief addresses conflict of interest allegations with 3 big clarifications

Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, issued a joint statement on Friday addressing and rejecting allegations made against them by the Congress party.
The couple described the claims as false and defamatory, offering three key clarifications in response to recent allegations.
The claims by Congress primarily revolved around Dhaval Buch’s consulting assignments, the couple’s rental income from a property leased to a Wockhardt associate, and Madhabi’s Employee Stock Options (ESOPs) from ICICI Bank.
The Congress party raised concerns over Dhaval Buch’s consulting work for companies like Mahindra & Mahindra, Pidilite, Dr. Reddy’s, and Alvarez & Marsal.
However, the joint statement explained that these assignments were based purely on Dhaval’s expertise and long professional history, which spans 35 years, including his role as Executive Director at Hindustan Unilever.
Mahindra & Mahindra, which contributed 94% of Agora Advisory’s income since 2019, stated that Dhaval was hired three years before Madhabi became Sebi Chairperson, purely for his expertise in supply chain management. The company rejected the claim that any Sebi orders were linked to Dhaval’s role.
Pidilite and Dr. Reddy’s also confirmed that Dhaval’s consulting work had no connection to any Sebi investigations. Both companies clarified that his expertise was sought based on his professional background, unrelated to his wife’s position at Sebi.
The statement also addressed the false claim that Agora Advisory provided services to Sembcorp and Visu Leasing while Madhabi was serving as a Whole Time Member (WTM) at Sebi.
It clarified that these assignments were completed in 2016-2017, before Madhabi joined Sebi. Additionally, it was explained that the ICICI Bank payments to Agora were simply interest payments on deposits, with no other links.
The couple highlighted that all consulting income was declared and separated transparently through the firm Agora Advisory, established by Dhaval after his retirement.
They expressed disappointment over the baseless claims, asserting that the allegations not only defamed them but also respected companies that hired Dhaval based on his merit.
The second clarification concerned the Buchs’ rental income from a property leased to an associate of Wockhardt, a pharmaceutical company. Critics had questioned the potential conflict of interest due to Sebi’s investigation into Wockhardt.
The joint statement clarified that Madhabi had no involvement in any investigations or approvals concerning Wockhardt.
Sebi operates under a strict Delegation of Powers system, ensuring that investigation files do not reach the Chairperson. Additionally, the rental agreement, they noted, was in line with standard market practices, with the income declared and taxes paid accordingly.
They also highlighted that full disclosures about the property and its income were made when Madhabi first joined Sebi as a Whole Time Member in 2017. The Buchs dismissed the allegations as malicious and motivated.
The third clarification was related to Madhabi’s Employee Stock Options (ESOPs) from ICICI Bank, where she previously worked.
The Congress had questioned the legitimacy of her ESOPs and pension payments, alleging irregularities.
In response, the statement explained that Madhabi retired from ICICI Bank, and as per the bank’s rules, retired employees could exercise their vested options over a ten-year period.
This was contrary to the claim that the options had to be exercised within three months, which applied only to employees who resigned.
Regarding the allegations of uneven pension payments, the Buchs clarified that these were part of a contributory Annuity Scheme from ICICI Prudential. The variation in amounts was due to the exercise of ESOPs at different stages, depending on market prices at the time.
The statement also refuted claims that Madhabi had dealt with ICICI-related files during her tenure at Sebi, confirming that all necessary disclosures were made and recusals maintained.
“We are upright and honest professionals and have led our respective professional lives with transparency and dignity, earning an unblemished record. Though everyone can see a clear pattern emerging to distort and twist the facts, we are confident that we will be able to demolish all such motivated allegations even in future, while reserving our right to take appropriate legal remedy as we may be advised,” said the joint statement.
“The fact that so far, allegations are being made with new falsehoods each time, in instalments, makes it clear that the only intention is to keep distorting facts, to keep making false allegations again and again to build a false narrative. Clearly, arriving at the truth is not the objective,” it said.