Lokpal clears Buch of conflict of interest allegations based on Hindenburg report

Economic Times

29-05-2025

The Congress party accused Buch of trading in listed securities, selling employee stock options from her previous employer ICICI Bank during her term at Sebi, and making money through her advisory firm that offered consultancy services to listed companies, breaching the regulator's conflict of interest policy.
The Lokpal dismissed complaints against former Sebi chairperson Madhabi Puri Buch, which were based on a Hindenburg Research report, citing a lack of verifiable material. Allegations of impropriety and conflict of interest, including investments in offshore funds linked to Vinod Adani, were deemed untenable and unsubstantiated. The Lokpal emphasized that Buch had redeemed the investments before the Sebi investigation began.
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Mumbai: The Lokpal on Wednesday disposed of complaints alleging impropriety and conflict of interest against former Sebi chairperson Madhabi Puri Buch based on a report by US-based short seller Hindenburg Research.The anti-corruption ombudsman said the allegations against Buch are on "'presumptions and assumptions' and not supported by any verifiable material" to direct an investigation.The six- member bench headed by Lokpal chairperson Justice AM Khanwilkar, while disposing of three complaints by different complainants including TMC MP Mahua Moitra, said the allegations are untenable, unsubstantiated and bordering on frivolity.Allegations of conflict of interest and financial misconduct were levelled against Buch by Hindenburg Research and the Congress party.Hindenburg alleged that Buch and her husband had investments in offshore funds controlled by Vinod Adani, the brother of Adani Group chairman Gautam Adani, which were allegedly used for manipulating funds and inflating stock prices of the group's listed entities in India."In that, the named RPS (Madhabi Puri Buch) had already redeemed the investments from the fund much before the investigations" into the allegation of manipulations of stocks against Adani Group of. companies had begun by Sebi; and it is evident from investigations by Sebi that the GDOF Cell 90, or IPE Plus Fund, in which the RPS and her husband had invested, had not made investments through EIFF and EMRF in any Adani Group shares," the order said."In any case the RPS (Buch) and her husband were not in control of the decision of the fund to make investments. They were only passive investors in the fund, which they had already redeemed in 2018," the order said.The Congress party accused Buch of trading in listed securities, selling employee stock options from her previous employer ICICI Bank during her term at Sebi, and making money through her advisory firm that offered consultancy services to listed companies, breaching the regulator's conflict of interest policy.