Madhabi Puri Buch claims to have never dealt with ICICI group during her SEBI tenure

Amid a barrage of serious allegations against her, including misuse of power and conflict of interest, SEBI Chairperson Madhabi Puri Buch and her husband issued a fresh statement on Friday. "There have been numerous questions raised and malicious campaigns run about our integrity," mentioned the joint statement, issued in their personal capacity. This marks the third statement since the release of US-based research firm's report on August 10 that leveled several allegations on the SEBI Chairperson, charges rubbished by Buch as attempts at “character assassination”. 

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"It is unfortunate that questions have been raised regarding the consulting assignments of  Dhaval Buch and the firms Agora Advisory in India and Agora Partners in Singapore. There seems to be an assumption that when a spouse of a senior government official is appointed as an advisor, it must be attributed to factors beyond professional merit. Such assumptions overlook the strength of qualifications and expertise and reach conclusions that are most unfortunate," mentioned the six-page statement dated September 13, touching upon a range of topics. 

Highlighting several details about Dhaval's profile and career, including testimonials from companies including Mahindra Group, Pidilite Industries, and Dr Reddy's Labs, the statement sought to establish that he has "his own strong reputation as a leading professional in his field". 

ALSO READ: Buch's consulting firm illegally accepted payments from listed entities, alleges Hindenburg Research

"Despite the transparency and professional clarity given by these organisations, it is unfortunate that the need to justify decisions taken by such respected companies, based purely on Dhaval’s expertise, has to be undertaken by them and by us. The strength of his qualifications and long years of experience should be sufficient, and questions about the motivations behind the decisions taken by these companies are unfortunate and defamatory not just for Dhaval, but for these respected companies as well," noted the statement. 

Among several clarifications, the Buchs wrote, in their statement, that the recent allegations that Agora Advisory provided services to two more companies, Sembcorp and Visu Leasing, while Madhabi was a Whole-Time Member (WTM) of SEBI are "patently false". "These assignments were concluded and income accrued in 2016-2017, before Madhabi even joined SEBI as Whole Time Member," it read. 

Buch took over as Chairperson of Sebi in March 2022, having previously served as a whole-time member of the regulator since April 2017.

"It has been claimed that ICICI Bank also paid Agora. What was concealed is the fact that these were interest payments on deposits. Ascribing motive to it is unfortunate and defamatory. As already stated in our previous communication, after Dhaval’s retirement, he undertook his consulting practice under the two companies Agora Advisory and Agora Partners. Dhaval’s consulting assignments were undertaken under a company structure so as to transparently isolate the income so generated and report accruals and expenses related to these assignments, as separate from his personal income and expenses," wrote the Buch couple. 

"It is unfortunate that a process that actually facilitates greater transparency is being sought to be projected as suspicious," they wrote. 

"In keeping with the highest standards of governance, Madhabi has never dealt with any file involving Agora Advisory, Agora Partners, the Mahindra Group, Pidilite, Dr Reddy’s, Alvarez and Marsal, Sembcorp, Visu Leasing or ICICI Bank at any stage after her joining SEBI. As evident from the above facts and the communications from the companies, the allegations are completely false, malicious and defamatory," mentioned the statement, asserting that she has complied with all of SEBI's disclosure and recusal guidelines while maintaining "a proactive continuing recusal list with SEBI over and above the requirements under the guidelines".

Rental Income

"There have been questions raised regarding the rental income received from a property owned by Madhabi and Dhaval. The property was leased out in the normal course. As it turned out subsequently, the lessee happened to be an associate of Wockhardt, a listed company which had come under investigation. Madhabi has not dealt with any files related to Wockhardt," mentioned the September 13 statement.

ALSO READ: INC accuses Buch of renting out property to Wockhardt's firm, calls it corruption

"Given the all-India remit of SEBI’s responsibilities, which encompass hundreds of investigations, thousands of surveillance alerts, hundreds of approvals, and hundreds of orders annually, the Chairperson is usually not even aware of specific cases, as they are handled in the normal course by other designated officials as per Delegation of Powers which have always been in place . In this context, even an allegation of conflict is not only defamatory, false and vexatious, but is clearly malicious and motivated," it added. 

"The rental agreement for the property in question was concluded in accordance with standard market practices and this property jointly owned by Madhabi and Dhaval is leased and the rental from the same is declared and tax paid accordingly. A simple internet search and analysis would show that the rental income from the property was completely in line with market rates. The assertion that the rental rates were 'off market' is patently false," it added. 

All necessary disclosures have been made to SEBI in writing right from Madhabi's appointment as a Whole-Time Member in 2017, including details about the property’s market value and the rental income derived from it, according to the couple. 

ICICI Bank-related matters

The statement also sought to address several questions regarding Madhabi's Employee Stock Options (ESOPs) from ICICI Bank. Calling such allegations "baseless", the Buchs wrote that "it is completely false that the options are to be exercised only in 3 months". 

"The fact is that the provisions of ICICI Bank’s ESOP scheme were different for resigning and retiring employees. Madhabi retired from ICICI Bank. Like other senior ICICI Group employees, Madhabi received ESOPs during her tenure. Only employees who resigned were required to exercise their vested options within 3 months," the statement mentioned.

"As already confirmed by ICICI Bank in its public statement, Madhabi retired from ICICI Bank, which allowed her a 10-year window to exercise her options. With respect to the baseless allegation concerning the uneven nature of pension amounts with gaps in between, the fact is that the pension payments were consistent. They were part of a contributory Annuity Scheme from ICICI Prudential," it added. 

ALSO READ: Congress levels fresh allegations against Madhabi Puri Buch, demands clarification from Sebi Chief, regulator, Centre

Earlier, the Indian National Congress (INC)—the country's main opposition party—leveled several serious allegations against Buch while providing several details about her past association with ICICI Bank that raised serious questions about her leadership at the top helm of the market regulator. 

The party raised several questions about the 'retiral benefit' received by Madhabi from ICICI Bank. 

The INC has demanded urgent clarification from three sides: Buch, the market regulator, and the Centre. 

"Depending on when Madhabi exercised her options and the prevailing market prices at the relevant time and the quantity of ESOPs exercised, the perquisite value is bound to vary each year. If no ESOPs were exercised in a given year, there would be zero value attached to it and this would be bound to be reflected in the returns as a gap year. This perquisite value is required to be filed under the 'Salary' category both by ICICI Bank and by the ex-employee. This is a clear law of the land," mentioned the joint statement. 

"With respect to the baseless allegations regarding holding ESOPs while serving at SEBI, it is to be noted that SEBI's guidelines permit board members, including the Chairperson, to hold and transact in ESOPs. Requisite disclosures and recusals are to be made. Madhabi had disclosed her ESOP holdings since 2017 when she first joined SEBI, and disclosed each subsequent transaction. This forms a part of contemporaneous official records of SEBI," it mentioned. 

Madhabi has never dealt with any files related to the ICICI Group of Companies during her tenure, the statement added. 

"We are upright and honest professionals and have led our respective professional lives with transparency and dignity, earning an unblemished record. Though everyone can see a clear pattern emerging to distort and twist the facts, we are confident that we will be able to demolish all such motivated allegations even in future, while reserving our right to take appropriate legal remedy as we may be advised," the statement noted. 

The "allegations are being made with new falsehoods each time, in instalments", which "makes it clear that the only intention is to keep distorting facts, to keep making false allegations again and again to build a false narrative. Clearly, arriving at the truth is not the objective," it concluded.

The Buchs' statement follows Hindenburg's move this week to question the SEBI chief’s "complete silence" on fresh allegations of impropriety, conflict of interest, and accepting payments from companies while serving as a member of the market regulator.

Meanwhile, many financial experts have raised serious concerns about Buch's conduct during her tenure at SEBI.

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