Mint Explainer: Why Lokpal cleared former Sebi chief Buch of corruption charges?

Mint

29-05-2025

Anti-corruption ombudsman Lokpal on Wednesday dismissed three complaints against former chairperson of the Securities and Exchange Board of India (Sebi) Madhabi Puri Buch that were largely based on a 2024 report by Hindenburg Research.
The Lokpal said it found no merit in the allegations of corruption and termed the complaints 'vexatious" and based on "presumptions". The ombudsman's order said there was no credible evidence of wrongdoing or conflict of interest by Buch or her husband.
Mint explains the allegations, what the independent statutory body found, and what it means for future cases.
What were the allegations against former Sebi chief Buch?
The complaints were filed between August and October 2024 by different individuals, including Trinamool Congress parliamentarian Mahua Moitra. All three cited a 10 August 2024 Hindenburg Reasearch report that questioned Sebi's actions under Buch's tenure.
Complainants alleged Buch failed to disclose a ₹5 crore investment in a fund linked to the Adani Group, received consultancy and rental income from entities under Sebi scrutiny, and profited from ICICI Bank employee stock ownership (Esops) while the bank faced regulatory action.
Also Read | Madhabi Puri Buch's Sebi tenure: A legacy of reform, controversy, and resistance
What did the Lokpal find and what did it note in its order?
The Lokpal dismissed all allegations, finding no prima facie evidence of an 'offence of corruption" under the Prevention of Corruption Act.
It noted that Buch and her husband had invested in Global Dynamic Opportunities Fund (GDOF) in 2015, two years before she joined Sebi. Their investment was unrelated to Adani-linked sub-funds and was fully redeemed in 2018, before Sebi's Adani investigation began in 2020. The Supreme Court had already found Sebi's Adani probe to be fair and comprehensive.
The Lokpal also rejected allegations of document redaction, calling the claim an indirect challenge to the apex court's findings.
On the charge of conflict of interest regarding Mahindra Group, the Lokpal noted that Buch had recused herself from matters relating to the group in 2019. Her husband, Dhaval Buch, received ₹4.78 crore in consultancy fees from Mahindra between 2019 and 2021, but the Lokpal found no link between this and regulatory decisions, which were handled by others at Sebi.
Similar charges were raised around Blackstone Inc. and its Reit licences. However, the Lokpal observed that Blackstone's registrations predated Buch's tenure as chairperson, and she had no involvement in subsequent approvals.
The Lokpal ruled that the ₹16.8 crore Buch earned from ICICI Bank Esops after joining Sebi was part of her past service package. There was no evidence linking these to any favourable treatment by Sebi, which had acted through independent committees in all ICICI-related matters.
The Lokpal found the complaints to be speculative, and lacking verifiable facts. 'The complaints were essentially founded on the Hindenburg report of 2024, by a known short seller trader whose focus was to expose or corner Adani Group of companies. That report, by itself, cannot be made the sole basis to escalate action against Buch," the order said.
'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 to direct an investigation."
What does this mean for Sebi?
The order effectively clears Buch of corruption allegations linked to the second Hindenburg report.
Legal experts say the complaints nevertheless pushed Sebi's internal governance under greater scrutiny. 'Public confidence is more a matter of perception than a regulatory issue. Clean chit or no clean chit, the confidence of public has been taken care of with the complaint and necessary actions have already been invoked by the current regime," said Aditya Bhansali, founding partner at Mindspright Legal.
Following Buch's departure, Sebi set up a high-level committee under new chairman Tuhin Kanta Pandey to overhaul its conflict-of-interest framework. The committee, which first met on 16 May, is evaluating public disclosure norms for board members' commercial interests, trading restrictions, recusal procedures, and even an ombudsman mechanism.
Bhansali noted that Sebi's earlier code of conduct was inadequate for the Buch-era controversies. 'It is not the order," he said, 'but the complaint filed by the complainants that sparked the necessity of implementation of the rules or code in order to avoid the conflict of interest."
Also Read: After Madhabi Puri Buch, will Sebi have a bureaucrat at its helm?
Can the Lokpal's order be challenged?
While the Lokpal Act provides no direct appeal mechanism, parties may approach the Supreme Court or a high court under writ jurisdiction.
'Courts are generally cautious in interfering with findings of quasi-judicial bodies like the Lokpal," said Hardeep Sachdeva, senior partner at AZB & Partners. 'A challenge would typically have to demonstrate that the order was perverse or manifestly arbitrary; ⁠it violates principles of natural justice, or it contains certain significant procedural irregularities."
Has Lokpal acted against senior officials before?
Yes. In 2021, the Lokpal ordered a probe into corruption charges against the then director general of the National Research Laboratory for Conservation of Cultural Property, leading to a CBI case.
It also passed an order against a high court judge over alleged undue influence. However, the Supreme Court stayed that order, raising concerns over the Lokpal's interpretation of its jurisdiction in such cases.
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Anti-corruption ombudsman Lokpal on Wednesday dismissed three complaints against former chairperson of the Securities and Exchange Board of India (Sebi) Madhabi Puri Buch, finding no merit in allegations of corruption.
The complaints were largely based on a 2024 report by Hindenburg Research.
The Lokpal called the complaints 'vexatious" and 'based on presumptions", finding no credible evidence of wrongdoing or conflict of interest by Buch or her husband, in the order of May 28.
Mint breaks down the allegations, why the Lokpal found them baseless and whether this order can be challenged and how the Lokpal, an independent statutory body, has looked at past high-profile complaints.
What were the complaints about?
The complaints were filed between August and October 2024 by different individuals, including MP Mahua Moitra. All three cited a 10 August 2024 Hindenburg report that questioned Sebi's actions under Buch's tenure.
Complainants alleged Buch failed to disclose a ₹5 crore investment in a fund linked to Adani Group, received consultancy and rental income from entities under Sebi scrutiny, and profited from ICICI Bank ESOPs while the bank faced regulatory action.
What did the Lokpal find?
The Lokpal dismissed all allegations, finding no prima facie evidence of an 'offence of corruption" under the Prevention of Corruption Act.
It noted that Buch and her husband had invested in Global Dynamic Opportunities Fund (GDOF) in 2015, two years before she joined Sebi. Their investment was unrelated to Adani-linked sub-funds and was fully redeemed in 2018—before Sebi's Adani investigation began in 2020. The Supreme Court had already found Sebi's Adani probe to be fair and comprehensive.
The Lokpal also rejected allegations of document redaction, calling the claim an indirect challenge to the apex court's findings.
On the charge of conflict of interest regarding Mahindra Group, the Lokpal noted that Buch had recused herself from matters relating to the group in 2019. Her husband, Dhaval Buch, received ₹4.78 crore in consultancy fees from Mahindra between 2019–2021, but the Lokpal found no link between this and regulatory decisions, which were handled by others at Sebi.
Similar charges were raised around Blackstone Inc. and its REIT licences. However, the Lokpal observed that Blackstone's registrations predated Buch's tenure as chairperson and she had no involvement in subsequent approvals.
As for the ₹16.8 crore Buch earned from ICICI Bank ESOPs after joining Sebi, the Lokpal ruled these were part of her past service package. There was no evidence linking these to any favourable treatment by Sebi, which had acted through independent committees in all ICICI-related matters.
What is the Lokpal's final word?
The Lokpal found the complaints to be speculative, lacking verifiable facts.
'The complaints were essentially founded on the Hindenburg report of 2024, by a known short seller trader whose focus was to expose or corner Adani Group of companies. That report, by itself, cannot be made the sole basis to escalate action against Buch," the order said.
It added, '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 to direct an investigation."
What does this mean?
The order effectively clears Buch of corruption allegations linked to the second Hindenburg report.
Legal experts say the complaints nevertheless pushed Sebi's internal governance under greater scrutiny. 'Public confidence is more a matter of perception than a regulatory issue. Clean chit or no clean chit, the confidence of public has been taken care of with the complaint and necessary actions have already been invoked by the current regime," said Aditya Bhansali, founding partner at Mindspright Legal.
Following Buch's departure, Sebi set up a high-level committee under new chairman Tuhin Kanta Pandey to overhaul its conflict-of-interest framework. The committee, which first met on 16 May, is evaluating public disclosure norms for board members' commercial interests, trading restrictions, recusal procedures, and even an ombudsman mechanism.
Bhansali noted that Sebi's earlier code of conduct was inadequate for the Buch-era controversies. 'It is not the order," he said, 'but the complaint filed by the complainants that sparked the necessity of implementation of the rules or code in order to avoid the conflict of interest."
Can the Lokpal's order be challenged?
While the Lokpal Act provides no direct appeal mechanism, parties may approach the Supreme Court or a High Court under writ jurisdiction.
'Courts are generally cautious in interfering with findings of quasi-judicial bodies like the Lokpal," said Hardeep Sachdeva, senior partner at AZB & Partners. 'A challenge would typically have to demonstrate that the order was perverse or manifestly arbitrary; ⁠it violates principles of natural justice, or it contains certain significant procedural irregularities."
Has Lokpal acted against senior officials before?
Yes. In 2021, the Lokpal ordered a probe into corruption charges against the then DG of the National Research Laboratory for Conservation of Cultural Property, leading to a CBI case.
It also passed an order against a High Court judge over alleged undue influence. However, the Supreme Court stayed that order, raising concerns over the Lokpal's interpretation of its jurisdiction in such cases.