Essel Group Chairman Dr Subhash Chandra accuses Madhabi Puri Buch of corruption, says she is main reason behind Sony deal collapse

In a rare press conference on Monday, Essel Group Chairman and former Rajya Sabha MP Dr Subhash Chandra alleged that Madhabi Puri Buch, the current chairperson of the capital market regulator Sebi, was involved in harming his conglomerate. Accusing Buch of various serious wrongdoings, including corruption and misuse of power, Dr Chandra also blamed her for the collapse of the Zee-Sony deal, which he claimed dealt a significant blow to retail shareholders. "Today, I'm giving the name of a person who was also part of the same gang that wanted to hurt us in many ways... This person is nobody else than Madhabi Puri Buch," said Dr Chandra.

“Buch is the main reason behind the Zee-Sony deal falling apart,” Dr Chandra said, referring to the proposed mega-merger that would have created a media giant with more than 90 channels across the domains of news, sports, and entertainment. ALSO READ: ZEEL categorically denies alleged breaches in agreement after receiving merger termination notice from Sony

“You may remember the few payments that I was not able to make to lenders in January 2019… I had mentioned at the time that there were a few people who were looking to cause harm to the Essel Group… She (Buch) was among them,” Dr Chandra said. 

Accusing Buch of corruption, bias and unethical behaviour, Dr Chandra said that in January 2019, Buch was among the group of people who meant to cause harm to his business group. Speaking on an incident from the time, when he sought more time from a group of lenders to repay certain debts, Dr Chandra said that Buch ignored his requests repeatedly in a deliberate attempt to damage his business interests.

“I implored lenders to grant me some time to be able to arrange the money… Buch said to them why they were giving time to Essel Group… She even fined two mutual funds (ICICI Prudential Mutual Fund and HDFC Mutual Fund) that granted the time,” said the Essel Group Chairman. 

Buch took over as Chairperson of Sebi in March 2022, having previously served as a whole-time member of the regulator since April 2017. Sebi imposed penalties on the two funds over their alleged involvement in the repayment default related to the Essel Group.

“In September 2021, I wrote to Tyagi ji (then Sebi chairman Ajay Tyagi)… Buch targeted me at the time, pushing for a swiftly response… I didn’t know at the time that she was corrupt. I saw it only as corporate rivalry,” said Dr Chandra. 

Ajay Tyagi served as Chairman of Sebi from March 2017 to February 2022. 

“On February 17, 2024, a known person called me suggesting that one Manjit Singh could help me. Singh offered to solve the matter with Buch, demanding a three-digit crore rupee figure… I kept mum. I didn’t know things would pan out this way,” the media baron said.

“Perhaps Singh was right… ICICI Bank, Madhavi Puri Buch and Chanda Kochhar used to connect a lot at the time,” Dr Chandra said. 

Chanda Kochhar was terminated as CEO and MD of ICICI Bank in October 2018 in connection with an alleged loan fraud case, after serving in the role for nearly nine years.

Dr Chandra said that Manjeet Singh was “working as a middleman, suggesting that he can solve the matter with Madhabi and her husband”.

Here are some other points mentioned by Dr Chandra in the September 2 press conference: 

• A Zee Media journalist sent me a mail on August 28 suggesting that the Sebi chief was extremely angry with Zee Media 
• The journalist also said that I (Dr Chandra) and my son will have to pay for it
• She closely monitored the Zee group’s news coverage
• Chanda Kochhar shares a good relationship with Buch
• When I asked for her time, Buch said that I am a bad person and even asked my son to part ways with me
• An investigation must be carried out on Buch
• Truth will prevail 
• Buch is a crook
• I am ready to face the consequences
• I spoke the truth
• I don’t fear anyone 
• I even wrote to the finance minister but there was no response; she might be busy
• I am confident that miscreants will be punished 
• After me, more people may come forward raising similar complaints 

Earlier on Monday, the main opposition the Indian National Congress alleged that Buch illegally took salary and ESOPs from ICICI Bank while being a full-time Sebi member. Read more

The latest developments come amid calls for a serious investigation into Buch's conduct during her tenure at Sebi. This follows a report released last month by US-based short-seller Hindenburg Research, which alleged that Buch and her husband, Dhaval Buch, had previously invested in offshore funds also used by the Adani group—an allegation the couple has categorically denied. The report also suggested a potential conflict of interest in her investigations into the conglomerate due to these investments. ALSO READ: Hindenburg attacking Sebi credibility, indulging in character assassination attempt of its chairperson, say Buchs 

Among a long list of financial experts, former Finance Secretary SC Garg said in an exclusive interview to Zee Business last month that Buch should step down as the recent turn of events is not "not good for the reputation" of the country's market regulator. In his view, the government should investigate the matter closely.

Several foreign investors have also raised concerns on the matter. Among them, eminent business and tech analyst, and economist Daniel Geltrude said that the allegations "can destroy investor confidence". 

"Corruption involving offshore funds can erode foreign inflows," he told the network last month. 

ALSO READ: Hindenburg vs Adani Saga | Madhabi Puri Buch should step down, situation not good for Sebi's reputation, says former Finance Secretary SC Garg