PAC summons SEBI chief Buch, officials on October 24

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Last Updated07/10/2024

The Public Accounts Committee (PAC), the parliamentary watchdog for government spending, has asked Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and other officials to appear.

The Public Accounts Committee (PAC), responsible for overseeing government spending, has summoned Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and other SEBI officials to appear before it on October 24, 2024.
This move comes in the wake of allegations stemming from the Hindenburg Research report and aims to address broader concerns about SEBI’s performance and impartiality.

The focus of the PAC’s inquiry will be on SEBI’s role in investigating the allegations against the Adani Group of Companies, specifically in light of claims made by Hindenburg Research.
The US-based firm alleged that Madhabi Puri Buch and her husband, Dhaval Buch, had ties to offshore entities involved in a money siphoning scandal linked to the Adani Group. The report sparked widespread opposition calls for a parliamentary probe into SEBI’s conduct and impartiality in its investigation of the Adani Group.

In response to the allegations, Madhabi Puri Buch and her husband issued a joint statement refuting the claims. They clarified that their investment in the fund mentioned by Hindenburg was made in 2015, when both were private citizens living in Singapore, two years before Madhabi joined SEBI.
Furthermore, they emphasized that SEBI has strict disclosure and recusal norms that Buch has adhered to diligently since becoming a Whole Time Member in 2017 and SEBI’s Chairperson in 2022.

While the PAC meeting will primarily review the overall performance of SEBI as a regulatory body, sources indicate that the panel will address the allegations of conflict of interest raised by Hindenburg.
Opposition members of the committee have expressed concerns about the impartiality of SEBI’s investigation into the Adani Group, given the serious nature of the accusations.
The PAC, chaired by senior Congress leader K C Venugopal, will also hear representatives from the Ministry of Finance and other regulatory bodies, focusing on the performance review of regulatory agencies established by acts of Parliament.
The meeting will include discussions on the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications.

The Opposition members of the PAC have been vocal in pushing for Buch’s appearance, seeking clarity on SEBI’s functioning in light of the Adani-Hindenburg controversy.
However, members of the BJP within the PAC have raised objections, asserting that the allegations target an individual, not the institution of SEBI itself.
They argue that the PAC’s mandate is to review the use of finances granted by Parliament, and unless there is evidence of financial misconduct by SEBI, its broader performance should not be under scrutiny.