Sebi Chairperson Madhabi Puri Buch continued to earn revenue from a consultancy firm during her seven-year tenure, potentially breaching rules for regulatory officials, news agency Reuters reported on Friday citing public documents reviewed by it. Buch's holdings potentially violate a 2008 Sebi policy that prohibits officials from holding an office of profit, receiving salary or professional fees from other professional activities, according to the Reuters report. The matter relates to allegations levelled by US-based short seller last week that Buch and her husband Dhaval Buch previously held investments in offshore funds also used by the Adani group—charges categorically denied by the couple—and suggesting a conflict of interest in her investigations surrounding the conglomerate due to such investments.

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After denying the charges in an immediate response to Hindenburg's report, released on the US-based firm's website in the late hours in India on Saturday, the Buchs released a second, more detailed statement on Sunday, again categorically denying Hindenburg’s allegations, and sharing a host of specific details including their career history, education and certain investments. Hindenburg Research is attempting to attack Sebi's credibility and indulging in attempted character assassination of its chairperson, the couple wrote, having already described the allegations as "baseless" and "devoid of any truth" in a shorter statement immediately after the short seller released its report on its website.

Buch also termed the allegations of a conflict of interest as an attempt at "character assassination".

"In line with our commitment to complete transparency, we are issuing a detailed statement... Hindenburg has been served a show cause notice for a variety of violations in India. It is unfortunate that instead of replying to the Show Cause Notice, they have chosen to attack the credibility of the SEBI and attempt character assassination of the SEBI Chairperson," the Buchs' 5-point statement mentioned. 

However, responding to the Buchs’ 15-point statement, Hindenburg took to microblogging site X (formerly Twitter) to say that their responses include "several important admissions” and raise “numerous new critical questions". Read more 

Meanwhile, several foreign investors raised concerns regarding the latest Hindenburg report, which contains several allegations against the Sebi chief and her husband.

Eminent market expert Mark Matthews said that he would see what the Supreme Court had to say on the matter. "I cannot see any evidence to support impropriety" in those accusations, he said. 

Veteran investor Marc Faber said that the people involved “should resign” if the allegations are true. Read more  

ALSO READ: Hindenburg attacking Sebi credibility, indulging in character assassination attempt of its chairperson, say Buchs 

In its report, released about 18 months after it accused the Adani group of financial misconduct and stock manipulation, the US-based firm alleged, citing whistleblower documents, that the Buchs held stakes in an offshore fund where a substantial amount of money was invested by associates of Vinod Adani, brother of Adani group chairman Gautam Adani. The Adani group has denied the accusations. 

Capital market regulator Sebi asked investors to remain calm and exercise due diligence before reacting to such reports. 

Mutual fund industry body AMFI also came in support of the Sebi chairperson, saying that the US short-seller is trying to create a trust deficit in the market ecosystem.

With inputs from agencies