Amid turmoil, all eyes on today’s Sebi board meet

Mumbai: The Securities and Exchange Board of India (Sebi) is set to hold a crucial board meeting on Monday, its first gathering following the allegations of conflict of interest against chairperson Madhabi Puri Buch by US-based Hindenburg Research and India’s Congress party.

The board is likely to take cognisance of the conflict of interest accusations and the issues arising from the withdrawn press release on employee matters. Although these topics are not on the official agenda, they may be informally discussed, according to people with knowledge of the matter. “Between the last board meeting and Monday’s meeting, any significant event concerning the institution, its board members, including the chairperson, has to be taken note of by the board,” said one of them.

In the period between the June 27 and September 30 board meetings, Sebi employees complained to the finance ministry about what they called a “toxic work culture.” The institution initially blamed external elements for the employees’ agitation, but later withdrew the statement after protests by staff.

During the period, Hindenburg alleged that Buch and her husband had investments in offshore funds controlled by Vinod Adani, the brother of Adani Group chairman Gautam Adani, which were allegedly used for manipulating funds and inflating stock prices of the group’s listed entities in India. It also alleged that Sebi had amended rules related to real estate investment trusts (REITs) in a manner that benefited Blackstone, where Buch’s husband was a senior advisor.

The Congress party accused Buch of trading in listed securities, selling employee stock options from her previous employer ICICI Bank during her term at Sebi, and making money through her advisory firm that offered consultancy services to listed companies, breaching the regulator’s conflict of interest policy.

The Buchs and Sebi issued statements rebutting these allegations, but the board is yet to give its opinion. The board consists of eight members, including Buch, four whole-time members of Sebi, and three part-time nominees from the finance ministry, corporate affairs ministry, and the Reserve Bank of India.

This will be the first board meeting for new corporate affairs secretary Deepti Gaur Mukerjee and the last one for deputy RBI governor M Rajeshwar Rao, who retires next month. External members may insist on discussing the allegations against the chairperson, said the people cited above.