Is Sebi chairperson like Caeser's wife: "Above suspicion"?

The Squirrels has learnt of another pending complaint against Buch, that alleges a non-responsive attitude to concerning information as well as a likely conflict of interest.

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Madhabi Buch SEBI

SEBI Chairperson Madhabi Puri Buch

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With the latest Hindenburg hit on India’s stock markets, the demand for a JPC and the political surround sound is intensifying. The target of Hindenburg’s latest report is the Securities and Exchange Board of India chair, Madhavi Puri Buch, who has been accused of irregularities while being the regulatory boss. While the former Uttar Pradesh CM and BSP chief Mayawati is the latest political voice to join the demand for a JPC — a demand that the BJP has rejected —  The Squirrels has learnt of another pending complaint against Buch, that alleges a non-responsive attitude to concerning information as well as a likely conflict of interest.

The complaint has been filed with the Ministry of Finance by the Religare Enterprises Limited (REL) about a notice sent to the SEBI chairperson as well as a whole time member (WTM) alerting them of a ‘suspicious WhatsApp message’, received by someone outside REL.

The WhatsApp message is purported to have been sent in the midst of a take-over bid on REL by the Burman group, which REL has been resisting. The documents seen by The Squirrels reveal that the message advises REL shares to be bought as the SEBI ‘has been managed through the Chairperson’ and that ‘they have committed to direct the… change in management’, implying that the take-over by the Burman’s has been approved. The message also claims ‘noting is already done by WTM for go ahead’.

REL sources say that a complaint was sent to SEBI but there was no corresponding action by the regulator. On May 9, 2024, the chairman of REL Dr Rashmi Saluja wrote a detailed letter to the finance minister, explaining REL’s position on the hostile take-over bid and alleged several regulatory compromises by Burman group over a six month period. The letter says that the REL was in touch with SEBI chairperson and WTMs to keep them aware of their ‘grave concerns’. It also alleges that Dhaval Buch, the husband of SEBI chairperson is a ‘close friend’ of the Burmans and that through him, pressure is being mounted on her to ‘for adopting a partisan approach’. 

The letter says that no response was received from either the SEBI chairperson or the WTMs.

A follow-up email was sent to the MoF in May 16, 2024 asking for the ministry to intervene and has also asked for the recusal of the WTM who is handling the REL case in SEBI. It is not immediately clear if the ministry has initiated any action yet.

In the meantime, between May and July 2024, REL has also got an order from the Delhi High Court to issue notice to the SEBI on its inaction (May 16, 2024) and a similar favourable order from the Securities Appellate Tribunal  (SAT) on  July 10, 2024.

REL is battling a hostile take-over by the Burmans of its healthcare business for the last several months. REL has alleged that the Burmans have used influence in the media to create hurdles for it to resist the take-over.

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