SEBI chief accused of earning ₹3cr via her advisory firm
What's the story
SEBI Chairperson Madhabi Puri Buch, is facing allegations from Congress leader Pawan Khera, in relation to her advisory firm, Agora Private Limited. Khera alleged that between 2016 and 2024, Agora earned ₹2.95 crore from six listed companies: Mahindra & Mahindra Limited, Dr. Reddy's, Pidilite, ICICI Bank, Sembcorp India, and Visu Leasing & Finance. He claimed this contradicts Buch's assertion that Agora became dormant upon her appointment as SEBI chief.
Violation
Agora's potential conflict of interest
Khera further claimed that any income received by Buch's firm from these entities could be seen as a conflict of interest. This would violate Section 5 of SEBI's Code on Conflict of Interest for members of the Board.
Major client
Mahindra's significant contribution to Agora's revenue
Khera highlighted that a substantial portion of the total revenue earned by Agora, ₹2.59 crore, came from Mahindra & Mahindra Group alone. This amount represents 88% of the total money received by Buch's advisory firm. He also revealed that Buch's husband, Dhaval Buch, personally received an income of ₹4.78 crore from Mahindra & Mahindra Group during her tenure at SEBI.
External scrutiny
Hindenburg Research's report on Buch's consultancy firms
The allegations against Buch come in the wake of a report by US-based short-seller Hindenburg Research. The report highlighted two consultancy firms that were operated by Buch and her husband: Singapore-based Agora Partners and India-based Agora Advisory. According to public documents analyzed by Reuters, Agora Advisory Pvt Ltd, where Buch holds a 99% stake, earned revenue of ₹3.71 crore during her seven-year tenure at SEBI.
Ownership controversy
Buch's response and continued shareholding in Indian firm
In response to the allegations, Buch stated that the consultancy firms were disclosed to SEBI. She also clarified that her husband utilized these firms for his consulting business, after retiring from Unilever in 2019. Hindenburg Research reported that Buch had transferred all her shares in Agora Partners to her husband in March 2022. However, company records for the financial year ending March 2024, indicate that Buch still holds shares in the consulting firm.
Conduct breach
Former bureaucrat labels Buch's actions as 'serious' breach of conduct
Subhash Chandra Garg, a former top bureaucrat in the Indian government and a SEBI board member during Buch's tenure, has labeled her equity in the firm and its continued business operations as a "very serious" breach of conduct. He stated that there was no justification for her to continue owning the firm after joining the board. Garg further added that this situation makes her position at the regulator completely untenable.