Investments in China, Rs 37 cr traded in listed shares: Congress' new allegations against Sebi's Madhabi Buch

Upping the ante over the conflict of interest row involving Sebi Chairperson Madhabi Buch, the Congress on Saturday claimed that she traded in listed securities while in possession of unpublished price sensitive information and has been investing in the Chinese firms at a time when India is facing geopolitical tensions with China.

Congress general secretary Jairam Ramesh pointed to “fresh conflict of interest allegations” against Buch, claiming that she, as a whole-time member and later as the Sebi chairperson, traded in listed securities worth Rs 36.9 crore.

The Congress attack comes a day after Buch said that she had made all necessary disclosures and complied with recusal guidelines in dealing with companies such as Mahindra Group that hired her husband, as she rejected allegations of impropriety as “false, malicious and motivated”.

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Buch and her husband Dhaval Buch in a joint statement – the second since US-based short seller Hindenburg Research charged her of not being motivated enough to act on allegations against the Adani group due to conflict of interest – also addressed issues raised by the opposition Congress over receiving payments from her previous employer the ICICI Bank while being a whole time member of the Sebi.

The statement said Buch never dealt with any file involving Agora Advisory and Agora Partners – the advisories where she held 99 per cent and continued to earn revenue even after she joined the market regulator body Sebi in 2017.

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Congress president Mallikarjun Kharge, in a post on X, said it is not surprising that the “government’s favourite, the Sebi chairperson, is also not behind in investing in Chinese companies”.

The new revelations prove that there are many things that are kept secret, he added.

Posing questions to Prime Minister Narendra Modi, Ramesh asked if he is aware that the Sebi chairperson has been trading in listed securities while in possession of unpublished price sensitive information.

“Is the PM aware that Madhabi Buch has made high value investments outside India? If yes, what is the date of this investment and date of disclosure?” Ramesh asked.

Is the PM aware that the Sebi chairperson has been investing in Chinese firms at a time when India is facing geopolitical tensions with China, the Congress leader asked.

Addressing a press conference at the AICC headquarters here, Congress’ media and publicity department head Pawan Khera alleged that between 2017-2023, Buch, as a whole-time member and later as the Sebi chairperson, traded in listed securities worth Rs 36.9 crore.

This is in violation of Section 6 of the Sebi’s Code on Conflict of Interest for the Members of Board (2008), he said.

He also gave a year-wise break up of the total trading in securities which in total amounted to over Rs 36.9 crore.

In addition to that, Khera said, “We have information that between 2017-2021, Madhabi Buch held foreign assets.” “We hereby ask: When was the first time she declared the foreign assets and to which agency of the government? Is it true that Ms. Madhabi P. Buch was actively involved in Agora Partners PTE (Singapore) as she was a signatory to the bank account?” he said.

Listing the details of her investment in the US between 2021 and 2024, Khera claimed that she had invested in Vanguard Total Stock Market ETF (VTI), ARK Innovation ETF (ARKK), Global X MSCI China Consumer (CHIQ) and Invesco China Technology ETF (CQQQ).

“It is deeply concerning to learn that Madhabi Buch, the Sebi chairperson, has been investing in Chinese funds. When the Prime Minister of India can publicly give China a clean chit, it’s hardly surprising that a key regulatory figure is engaging in investments linked to China,” Khera said.

At the press conference, Khera also recapped previous conflict of interest allegations levelled by the Congress against Buch.

“From September 2, 2024, the Congress started unravelling the long-kept secrets of the current Sebi Chairperson Madhabi Buch on how she has been deceiving the people of India,” he said.

He pointed to the Congress’ earlier allegation that the current Sebi chairperson drew an income of Rs 16.8 crores from the ICICI Bank and ICICI Prudential in the form of salary, ESOPS, TDS on ESOPs, while also drawing a salary from the Sebi was brought to the forefront.

“Shockingly, the Sebi was also adjudicating complaints against the ICICI and its affiliates during this period,” he said.

In lieu of a clarification issued by the ICICI Bank, the Congress presented facts with regard to questions raised on “retiral benefits”, “ESOPs”, and “TDS on ESOPs”.

So far, ICICI has not responded to our newly- presented facts, Khera said.

“We disclosed that Ms. Madhabi P. Buch rented her property to ‘Carol Info Services Limited’, an affiliate of Wockhardt Limited, between 2018-2024.

Wockhardt has been under Sebi’s investigation for cases, including that of insider trading,” he said.

“We exposed Ms. Madhabi P. Buch’s public lie that Agora Advisory Pvt Ltd became ‘immediately dormant’ upon her joining Sebi. She still holds a 99% stake in it, and the company has actively provided consultancy/advisory services, receiving Rs 2.95 Crores from six Sebi-regulated entities between 2016-2024,” Khera added.

Through their response, Dr. Reddy’s Laboratories and Pidilite confirm that they made payments to Dhaval Buch via Agora Advisory Private Limited, the Congress leader said.

The payments from listed companies, which are regulated by the Sebi to Agora Advisory Private Limited violate Section 5 of Code on Conflict of Interests for Members of Board (2008), he said.

“Further, Mahindra & Mahindra must clarify whether they paid large sums to both Dhaval Buch personally and his joint consultancy, Agora Advisory Private Limited, in which Madhabi Buch holds a 99% stake. If yes, did Mahindra & Mahindra fail to conduct KYC and due diligence before transferring substantial public funds to Agora Advisory Private Limited?” he said.

“If Dhaval Buch was paid Rs 4.78 crores personally, they must also clarify the payment of Rs 2.59 crores to Agora Advisory Private Limited, a supposedly ‘dormant’ company,” Khera said.

The Congress’ allegations come weeks after Hindenburg Research launched a fresh broadside against Buch, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.