An investigation into allegations against Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch found nothing incriminating, government sources told India Today TV, adding that she would complete her tenure that ends in February 2025.
The probe, sources said, was necessitated after serious allegations of conflict of interest and financial misconduct were levelled against the Sebi chief by US short-seller Hindenburg Research and the Congress party. Agencies were asked to look into the allegations; the Finance Ministry also simultaneously began its investigation into the matter, sources said.
Allegation 1: REIT and Blackstone Connection
One of the primary allegations raised by Congress was that Buch’s promotion of Real Estate Investment Trusts (REITs) benefitted Blackstone, a global investment firm with which her husband is associated. The opposition accused her of misusing her position as Sebi chairperson to favour Blackstone.
REITs, however, were first proposed in 2007 during the UPA era. It was in 2016 that Sebi released a formal set of norms. Buch took over as Sebi chairperson on March 1, 2022, succeeding Ajay Tyagi.
While she has been credited with implementing significant reforms that impacted multiple global players, including Blackstone, government sources told India Today TV that the allegations are “politically motivated and baseless”.
Allegation 2: Undisclosed Income from ICICI Bank
Another allegation against Buch was her failure to disclose income received from her previous stint at ICICI Bank. It was claimed that the money she received was not reported properly.
Upon review, the government found no illegal transactions and confirmed that Buch had paid all necessary dues. ICICI Bank clarified that after her retirement in October 2013, Buch did not receive a salary or ESOPs, only standard retirement benefits in line with industry norms.
Buch had served at ICICI for 12 years, including two years as CEO of ICICI Securities. The bank highlighted that the retirement benefits she received were standard for top managers across the industry.
Allegation 3: Employee Complaints about Work Culture
A third front against Buch opened when employees within Sebi sent letters to the Finance Ministry, alleging a toxic work culture under her leadership. The complaints caused concern within both Sebi and political circles. Employees accused the leadership of calling names and shouting at staff, leading to grievances about management practices.
The government investigated the matter and spoke with employees. The issue was resolved when Sebi’s top management was asked to be more sensitive towards staff. Government sources suggested that the dissatisfaction may stem from the sweeping reforms Buch has implemented within Sebi, as her efforts to clean up the system have been met with resistance.
Taking all factors into account, the government has decided that Buch will complete her tenure, which ends on February 28, 2025.