Hindenburg Research charged the Chairperson of the Securities and Exchange Board of India, Madhabi Puri Buch, with failing to address emerging issues connected with her past consulting firm Agora Advisory. In a post on X, formerly Twitter, Hindenburg pointed to possible conflicts of interest-no different from the accusations of the Congress party on September 10, 2024.
SEBI Chief Madhabi Puri Buch and her husband Dhaval Buch releases a statement in the context of allegations made by Hindenburg on 10th Aug 2024 against them.
"The investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens… pic.twitter.com/g0Ui18JVNT— ANI (@ANI) August 11, 2024
He also alleged that Agora Advisory, whose majority shareholder is Ms. Buch, had provided services during Ms. Buch's tenure as a full-time member in SEBI to several major listed companies, including Mahindra and Mahindra, ICICI Bank, Dr. Reddy's, and Pidilite, raising questions of her impartiality and adherence to SEBI's regulations.
SEBI Chairperson Madhabi Buch’s response to our report includes several important admissions and raises numerous new critical questions.
(1/x) https://t.co/Usk0V6e90K— Hindenburg Research (@HindenburgRes) August 11, 2024
Charge Sheet by Congress
The controversy gathered pace for the first time when the Congress party held a press briefing accusing Ms. Buch of holding 99% stake in Agora Advisory even after she took up her role at SEBI. It also claimed that her firm continued to offer consultancy services to regulated companies despite an earlier statement from Ms. Buch that the consultancy had become dormant.
Further, Congress mentioned that Ms. Buch's spouse, Dhaval Buch, was continuing to receive income from Mahindra and Mahindra even in post-retirement years, thereby making it a case of conflict of interest in the family.
Companies Reject Charges and Deny Any Wrongdoing
To counter such charges, companies like Mahindra and Mahindra, Pidilite, and Dr. Reddy's have denied the charge of being part of any conflict-of-interest situation. Such companies have rejected such charges, in their respective filings with the regulatory mechanisms of the economy, on the basis of adherence to rules and laws.
However, Hindenburg explained that these allegations pertain specifically to Ms. Buch's consultancy in India, and nothing has surfaced about her Singapore-based entity as of yet. In essence, the short-seller criticised Ms. Buch's continued silence on the matter; thus, it has only served to further drive public scrutiny.
Nifty Index Ends in Red today, Declines by 1.16%
The Nifty Realty index finished in negative terrain, tumbling 1.16% to 1026.65 on Wednesday. The equities of real estate firms were in a mixed bag. While some stocks climbed up, the others nosedived.
Today's Gainers:
- Sobha Ltd spearheads the rally of 2.21%, hence becoming the topmost gainer in the realty segment
- Macrotech Developers Limited gains 0.85%
- Brigade Enterprises rose modestly by 0.2%
Today's Losers:
- Phoenix Mills Ltd was the top loser- 3.54% down.
- Sunteck Realty Ltd tanked 3.52%.
- Prestige Estates Projects Ltd -3.58%
- Mahindra Lifespace Developers Ltd - 2.05%
- Godrej Properties Ltd- 1.93%
- The breadth so far in the negative front was dragging the index down.
Summary of the Market:
Action NSE Nifty50 - down 122.65 points to close at 24,918.45.
BSE Sensex- down 398.13 points to close at 81,523.16.
Growing Pressure on SEBI Chairperson
The raging controversy has questioned transparency and accountability within India's financial regulatory body. It has cast a beaming light on the accusations from Hindenburg and Congress, putting additional pressure on Ms. Buch to justify her position.
Inputs by Agencies
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