Govt seeks applications for SEBI chief’s post; Congress takes swipe at ad for it

The government on Monday invited applications for the Securities and Exchange Board of India (SEBI) chairperson’s post around a month before Madhabi Puri Buch’s three-year term as the securities and commodity market regulatory body head ends on February 28. Buch assumed the charge in March 2022.

The SEBI chief came under the spotlight after US-based short-seller Hindenburg Research, which has since announced it was shutting down, accused Buch and her husband, Dhaval Buch, of having a stake in obscure offshore entities used in “the Adani money siphoning scandal”.

The allegations sparked a political row with Opposition Congress demanding a parliamentary probe into the charges. The ruling Bharatiya Janata Party (BJP) attacked the Congress, questioning why it was against the Indian companies, whether government or private, and defended the foreign ones.

The Adani Group dismissed the charges as “malicious, mischievous and manipulative selections of publicly available information” and the Buchs called them a “character assassination” attempt.

On Monday, the economic affairs department under the Union finance ministry said in a public advertisement that the new SEBI chief’s appointment shall be for a maximum period of five years from the date of assumption of charge or until attaining the age of 65 years of the appointee whichever is earlier. It invited the applications by February 17.

The advertisement said the chairperson would receive a pay equivalent to a government of India secretary— ₹5,62,500 monthly without house and car.

The advertisement cited the SEBI chief’s role and importance as a regulator. It said the candidate should have “high integrity, eminence and reputation preferably above 50 years with more than 25 years of professional experience”.

The advertisement said the candidate should have a “shown capacity in dealing with problems relating to securities markets or has special knowledge or experience of law, finance, economics, accountancy’ which in the opinion of the central government shall be useful to the board”.

“The chairman should be a person who does not and will not have any such financial or other interests as are likely to affect prejudicially his function as the chairman,” the advertisement said.

The government appoints the SEBI chairperson on the Financial Sector Regulatory Appointments Search Committee’s recommendation. The advertisement said the panel is free to recommend any other person on merit who has not applied.

Congress lawmaker Manickam Tagore took a swipe at the advertisement, saying “Sahib” is silently searching for a new SEBI chief. “Adani’s trusted lady is on her way out. Thank you, Leader of Opposition [Rahul Gandhi], for standing up for the investors,” Tagore wrote on X.

Rahul Gandhi led the Congress’s attack after Hindenburg in 2023 accused the Adani Group of stock price manipulation. The US-based short seller alleged that Madhabi Puri Buch, who was in charge of probing the allegations, had a stake in obscure offshore entities used for the purpose.

Hindenburg Research cited documents from a whistleblower and alleged Madhabi Puri Buch and Dhaval Buch held stakes in offshore Bermuda and Mauritius funds via complex structures. It alleged that Dhaval Buch wrote to a Mauritius fund administrator to make him the “sole person authorised to operate the accounts” weeks before Madhabi Puri Buch’s appointment as a whole-time SEBI member in 2017.

Hindenburg’s January 2023 report accused Adani Group of using tax havens and stock manipulation. It led to a $150 billion sell-off in the conglomerate’s stocks. The report also prompted a SEBI inquiry.

The Supreme Court in January refused to order a separate probe into the allegations of accounting fraud and stock manipulation against Adani Group, saying there was no material to show SEBI’s “glaring, wilful, or deliberate inaction” in its investigation or any suggestion of regulatory failure. The court dismissed the reliance on the Hindenburg report or other unsubstantiated news reports as the basis for questioning SEBI’s comprehensive investigation.

The Supreme Court in July dismissed a petition demanding a review of its January verdict. It rejected a plea for the creation of a special investigation team to investigate Hindenburg’s allegations, noting that newspaper articles or reports by third-party organisations cannot be treated as conclusive proof of SEBI’s probe inadequacy.

Six Adani Group firms in May said they received SEBI notices over alleged violation of stock market norms. SEBI also sent a “show cause” notice to Hindenburg Research over alleged violations of rules to set up a short bet based on non-public information. Hindenburg dismissed the allegations as “nonsense” in July.