Sebi chair Buch traded in listed stocks, violating conflict-of-interest policy, alleges Congress

Mumbai: Sebi chairperson Madhabi Puri Buch has traded in listed securities worth about Rs 37 crore during her tenure at the regulatory body, violating its conflict-of-interest policy, Congress alleged on Saturday in a fresh salvo against her.

The country’s main opposition party also accused Buch of making investments abroad including in Chinese funds.

Congress spokesperson Pawan Khera alleged that Buch traded stocks between fiscal years 2018 and 2023, with the highest value of transactions totalling around Rs 20 crore recorded in fiscal 2019.

Section 6 of Sebi code prohibits a board member including the chair from dealing in listed securities when in possession of unpublished price-sensitive information.

“Considering the position she holds, she has access to all sorts of information in the securities market,” Khera said. “How could she trade in them?”

Buch joined Sebi in April 2017 as a whole-time member before becoming its chair in March 2022.Buch did not reply to ET’s emailed queries on Congress’ latest accusations till press time Saturday.Congress also accused her of holding foreign assets including investments in Vanguard Total Stock Market ETF, ARK Innovation ETF, Global X MSCI China Consumer and Invesco China Technology ETF.

The party questioned when was the first time Buch declared her foreign assets including investments in Chinese funds and to which government agency.

It demanded Prime Minister Narendra Modi to look into the matter. “Is the PM aware that the Sebi chairperson has been trading in listed securities while in possession of unpublished price sensitive information? Is the PM aware that (Buch) has been investing in Chinese firms at a time when India is facing geopolitical tensions with China?” Khera asked.

He said former Sebi chairman M Damodaran had sold his listed securities before he assumed the top position at the regulatory body. “These are standards one set. If you say, you have made disclosures, to whom you have disclosed these doesn’t matter,” he said.

While Buch earlier denied or clarified on the previous allegations made by Congress, the party dismissed them on Saturday, arguing that she has not denied the rental income and advisory fee earned by her and her consulting firm from entities falling under Sebi’s purview while she held an office at the organisation.

These transactions/assignments breached the regulatory body’s conflict of interest policy under Section 5, Congress claimed.

Section 5 prohibits a member including the chair from holding any other office of profit or engaging in any other paid professional activity.

Buch had said three companies — M&M, Pidilite and Dr Reddy’s — accounted for the income of Agora Advisory from 2019 to March 2024, in which she owned 99%.

On Saturday, Khera questioned: “Why were you lying when you said Agora Advisory was a dormant entity when it was not? It was getting consultancy fees…”

“The other lie Buch said was she didn’t know she was renting her property (in Mumbai) to someone related to Wockhardt (which was under Sebi’s investigation for an insider trading case). You are in Sebi and you couldn’t find out who the lessee is. We got to know but you got to know late,” Khera remarked.

On Buch saying that the allegations are based on her and her husband’s income-tax returns obtained through fraudulent and illegal means, Khera said the party has not said in its press statements that the facts are sourced from tax filings.