Lokpal seeks SEBI chief’s response on conflict of interest charges

Lokpal seeks explanation from SEBI chief on conflict of interest charges, following complaints from Hindenburg Research.

Anti-corruption watchdog Lokpal on Friday (November 8, 2024) sought an explanation from the chief of India’s stock market regulator, Madhabi Puri Buch, on the conflict of interest charges levelled against her in three separate complaints that cited a recent report from the U.S.-based shortseller firm, Hindenburg Research.

The order, issued by a Bench led by Lokpal chairperson Justice A.M. Khanwilkar, stressed that this was only a procedural direction and does not explicitly name Ms. Buch. However, it implies that Ms. Buch is required to file an affidavit within four weeks from the receipt of the order, and the Lokpal Bench will take up the mater for further consideration on December 19.

Also Read: SEBI chief Madhabi Puri Buch skips Parliament’s PAC summons, citing personal reasons

Hindenburg Research, which had alleged malfeasance and stock price manipulation by the Adani group of companies in early 2023, published a report this August stating that the Securities and Exchange Board of India (SEBI) had drawn a blank in its probe into the Adani group due to a reluctance “to follow a trail that may have led to its own chairperson”; apart from regulatory “conflict or capture”.

Following the research firm’s report, SEBI, as well as Ms. Buch and her spouse Dhaval Buch, who was also named in the report, had issued separate statements in a bid to clarify those charges.

A complaint was filed in the matter with the Lokpal on August 13, 2024, naming the public servant [Ms. Buch] against whom action was sought under the Lokpal and Lokayuktas Act for allegedly having committed an offence punishable under the Prevention of Corruption Act. Another plaint was submitted with similar charges on September 11, followed by a third one on October 14.

Having gone through the complaints, the Lokpal issued an order on Friday, stating: “For the present, without expressing any opinion on the relevance and admissibility of the allegations/contents of the complaint (s) and the explanatory affidavit (s), including about the correctness of the plea taken therein by the respective complainant, we deem it appropriate to call upon the said RPS (respondent public servant) to offer explanation qua the allegations made against her in the respective complaint and elaborated in the concerned explanatory affidavit.”