On Monday, the government invited applications for the position of chairperson of the Securities and Exchange Board of India (SEBI), approximately a month before Madhabi Puri Buch’s three-year tenure as head of the securities and commodities market regulator concludes on February 28. Buch assumed the role in March 2022.
The SEBI chief faced scrutiny after the now-defunct US-based short-seller Hindenburg Research alleged that Buch and her husband, Dhaval Buch, were linked to offshore entities involved in the alleged “Adani money siphoning scandal.”
These allegations ignited a political controversy, with the Opposition Congress demanding a parliamentary investigation. Meanwhile, the ruling Bharatiya Janata Party (BJP) criticized Congress, accusing it of opposing Indian companies while siding with foreign entities.
The Adani Group dismissed the claims as “malicious, mischievous, and manipulative selections of publicly available information,” while the Buchs labeled the accusations an attempt at “character assassination.”
The Union finance ministry’s economic affairs department issued a public advertisement on Monday, outlining the terms of the SEBI chairperson’s appointment. The selected candidate will serve for a maximum of five years or until the age of 65, whichever comes first. Applications must be submitted by February 17.
According to the advertisement, the chairperson will receive a monthly salary of ₹5,62,500, excluding housing and transportation benefits. It emphasized the role’s significance as a regulatory position and sought candidates with “high integrity, eminence, and reputation,” preferably above the age of 50 with over 25 years of professional experience.
The ideal candidate should have expertise in handling securities market-related issues or possess specialized knowledge in law, finance, economics, or accountancy, as deemed useful by the government. Additionally, the appointee must not have any financial or other interests that could conflict with their responsibilities as chairperson.
The SEBI chairperson is appointed based on recommendations from the Financial Sector Regulatory Appointments Search Committee. The advertisement noted that the committee reserves the right to recommend other meritorious candidates, even if they have not applied.
Congress lawmaker Manickam Tagore criticized the process, alleging the government was discreetly searching for a new SEBI chief. He referred to Madhabi Puri Buch as “Adani’s trusted lady,” thanking Rahul Gandhi for advocating for investors’ rights.
Rahul Gandhi spearheaded Congress’s attack following Hindenburg Research’s 2023 allegations against the Adani Group, accusing it of stock price manipulation. The report also alleged that Buch, while overseeing the investigation, had a stake in offshore entities implicated in the allegations.
Hindenburg’s claims, based on whistleblower documents, suggested Madhabi Puri Buch and her husband held stakes in offshore funds in Bermuda and Mauritius via complex structures. It alleged that weeks before Buch’s appointment as a full-time SEBI member in 2017, Dhaval Buch had requested a Mauritius fund administrator to grant him exclusive control over certain accounts.
Hindenburg’s January 2023 report accused the Adani Group of exploiting tax havens and manipulating stock prices, triggering a $150 billion sell-off in Adani Group stocks and prompting a SEBI investigation.
In January, the Supreme Court declined to order a separate probe into these allegations, stating there was no evidence of SEBI’s “glaring, willful, or deliberate inaction” or regulatory failure. The court also dismissed reliance on the Hindenburg report or unsubstantiated media reports as grounds for questioning SEBI’s investigation.
A petition seeking a review of the court’s decision was dismissed in July, with the court rejecting calls for a special investigation team to probe Hindenburg’s allegations, citing that third-party reports cannot serve as conclusive evidence of SEBI’s inadequacy.
In May, six Adani Group companies disclosed that they had received SEBI notices for alleged stock market norm violations. SEBI also issued a “show cause” notice to Hindenburg Research for alleged violations related to using non-public information to establish a short position. Hindenburg dismissed these accusations as “nonsense” in July.
