Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (SEBI), is facing mounting pressure and scrutiny from various fronts. What began with allegations from American short-seller Hindenburg Research has escalated into a multi-faceted controversy involving political, domestic, and internal challenges.
Allegations from Hindenburg Research
The controversy ignited in March when Buch referred to herself as the "Unilever wife" at a public forum, highlighting her efforts to make mutual funds more accessible. Her husband, Dhaval Buch, has a long history with Unilever and Blackstone, paving the way for suspicious potential conflicts of interest.
Hindenburg Research published a scandalous report on August 10, 2024, accusing the Buchs of financial misconduct linked to offshore funds associated with the Adani Group.
According to Hindenburg, these offshore funds are tied to tax havens and controlled by Vinod Adani, brother of Gautam Adani. Allegations suggest that the Buchs invested in these funds before her appointment at SEBI, raising serious questions about her impartiality in the ongoing investigations into the Adani Group. Additionally, Hindenburg claimed that Buch used her personal Gmail account for official communications while serving as a Whole-time Member of SEBI in 2018, potentially violating regulatory protocols.
Political Fallout from Congress
As the Hindenburg allegations simmered, the Congress party seized the opportunity to launch its own attacks. Party spokesperson Pawan Khera alleged that Buch continued to receive a salary from ICICI Bank while serving at SEBI, which he claimed represented a serious breach of ethics. However, ICICI Bank clarified that Buch had not received any salary or ESOPs after her superannuation in October 2013, aside from retiral benefits.
Allegations from Zee Group
Adding to all the chaos, Zee Group patriarch Subhash Chandra has leveled serious accusations against Buch, calling her "corrupt" amid an ongoing investigation into alleged fund diversion from Zee exceeding ₹2,000 crore. Chandra claimed that Buch's income has dramatically increased since her appointment at SEBI, suggesting possible misconduct. He alleged that a person named Manjit Singh approached him, proposing to resolve pending SEBI issues for a fee, and accused Buch and her husband of extorting money from corporates.
Chandra also implicated former ICICI Bank CEO Chanda Kochhar, alleging that she made substantial payments to Buch. His accusations come at a time when SEBI is preparing to issue fresh show-cause notices to him and his son, Puneet Goenka, regarding the fund diversion case.
Internal Struggles: A Toxic Work Culture
Internally, Buch faces criticism for fostering a toxic work environment at SEBI. Reports from employees indicate unrealistic performance targets, excessive work hours, and a culture of public humiliation.
1. Unrealistic performance targets: Employees have reported that management raised Key Result Area (KRA) targets by 20%-50%, creating immense pressure.
2. Excessive work hours: Many employees are compelled to work overtime and even take files home, leading to significant stress and burnout.
3. Public humiliation: Allegations of senior management engaging in shouting and name-calling during meetings have created a culture of fear.
4. Monitoring and lack of trust: The installation of monitoring barriers to track attendance has been criticized as a sign of mistrust.
The toxic work culture has reportedly led to a surge in appointments with mental health counselors, urging HR to increase counseling services at SEBI.
Madhabi Puri Buch's tenure as SEBI Chairperson is marked by a perfect storm of allegations, political fallout, and internal strife. As the scrutiny gets worse from multiple fronts, the question remains: can she navigate this turbulent landscape and restore confidence in her leadership?
The coming months will be critical in determining the future of Buch and SEBI amidst these growing controversies.
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