In a show of support for its chairperson, the Securities and Exchange Board of India (SEBI) has come out defending Madhabi Puri Buch after allegations levelled against her by a prominent short-selling firm.
The US-based Hindenburg Research had recently accused Buch of having a conflict of interest regarding past investments. However, SEBI maintains that the regulator has robust mechanisms to address such issues, which includes mandatory disclosures and recusal in relevant matters.
It stated that Buch has duly disclosed her security holdings from time to time as required. Moreover, she has recused herself appropriately in cases involving potential conflicts. SEBI also advised investors to exercise caution before reacting to such reports and conduct due diligence.
The regulator highlighted that it has built a strong regulatory framework that safeguards investors while following global best practices. It noted that investigations into past allegations against major corporate groups had been conducted thoroughly and orders passed by the Supreme Court.
SEBI clarified that regulations are formed after approval from its board, which includes officials from key economic ministries. All discussion documents and outcomes are also made public, dismissing claims that any rules favoured a particular conglomerate.
Buch and her husband have issued statements maintaining the investments in question were made in 2015 when they were private individuals in Singapore, well before she joined SEBI. They said the decision was based on a childhood friend's experience and track record as an investor.
Major players named in the reports have rejected the “baseless” claims, with one clarifying its related fund made no direct or indirect investments in the groups mentioned.
SEBI continues to look into the matter through its proper procedures while upholding principles of natural justice. As the dust settles on the issue, the regulator's show of support for its chairperson remains notable.
