Lokpal gives clean chit to Madhabi Puri Buch in Hindenburg case

The Hindu

28-05-2025

The Lokpal on Wednesday (May 27, 2025) disposed of all three complaints against Madhabi Puri Buch, former Chairperson of Securities and Exchange Board of India (SEBI), in the Hindenburg case, granting a major relief for Ms. Buch as well as the market regulator she once headed.
A full bench of the Lokpal headed by Chairperson Justice A.M. Khanwilkar delivered the judgment.
'We have concluded that the allegations in the complaints are more on presumptions and assumptions and not supported by any verifiable material and do not attract the ingredients of the offences in Part Ill of the Act of 1988, so as to direct an investigation therefor. Accordingly, these complaints are disposed of,' the bench said in its order. The Act here refers to the Prevention of Corruption Act, 1988.
Referring to Hindenburg report, it said that the complaints were essentially founded on the report 'by a known short seller trader whose focus was to expose or corner Adani Group of Companies'.
'As noted in our order dated 20.09.2024, that report by itself cannot be made the sole basis to escalate action against the RPS [Ms. Buch],' the order stated.
'The complainants, being conscious of this position, advisedly attempted to articulate allegations independent of the stated report but the analysis of the allegations by us ended with a finding that the same are untenable, unsubstantiated and bordering on frivolity,' the order said.
'The scope of inquiry at this stage is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence,' the Lokpal observed.
Stating that this being a case of corruption alleged against a public servant, the bench added they had to reckon the plea or the comment offered by the concerned public servant with care and circumspection.
As per the order, the subject matter of these complaints was identical, though filed by separate complainants.
Five allegations
Broadly, there are five allegations against Ms. Buch: She and her husband invested a substantial amount in a fund linked to investments in Adani Group of companies, the group facing scrutiny before SEBI for stock price manipulations.
She failed to disclose the investments in obscure funds to the Board of SEBI and the Supreme Court-appointed Expert Committee.
She gained quid pro quo in the garb of consultancy services fees by AAPL, a firm in which she had 99% of ownership, and through her husband Dhaval Buch, from entities such as the Mahindra & Mahindra Group and Blackstone Inc., firms having regulatory cases pending before SEBI when she was a wholetime Member or Chairperson of SEBI.
She gained quid pro quo in the garb of rental income from Carol Info Services Private Limited, allegedly linked to Wockhardt Ltd, a firm under investigation by SEBI for insider trading.
She gained undue advantage by selling her ESOPs (employee stock ownership plans) from ICICI Bank over a period of five years from 2017 — though the same had been vested in RPS in 2013 — during which period ICICI Bank had regulatory issues pending before SEBI and any adverse action against it would have influenced the market price of the ESOPs of Ms. Buch.
She made a pretence of recusal from matters of M&M Group and Blackstone Inc., but nothing prevented her from influencing the other wholetime Members and the Board of SEBI for a favourable outcome of cases pending and under investigation by the regulator against the entities, and which she did owing to her official position.
Ms. Buch had denied all the allegations. The Hindu had contacted her for a comment on the Lokpal order and her comment is awaited.
'Unnecessary to analyse reported decisions'
'We may also make it amply clear that for the findings reached in this decision on the relevant facts, it is unnecessary to dwell upon the purport of Section 50 and 51 of the Act of 2013 for action taken in good faith. That aspect has already been implicitly answered in favour of the RPS [Ms. Buch],' the order said. The Act here refers to the Lokpal and Lokayuktas Act, 2013.
'The parties have relied upon reported decisions. However, we do not deem it necessary to burden this order by analysing the same, as the factual matters have been analysed and dealt with in this order keeping in mind the ingredients of the offences under Act of 1988 invoked by the complainants. We have unreservedly answered the same in favour of the RPS [Ms. Buch],' it pointed out.