Lokpal Clears Ex-Sebi Chief Madhabi Puri Buch In Market Fraud Allegations

India's anti-corruption ombudsman body, the Lokpal, has dismissed accusations of wrongdoing and conflicts of interest against Madhabi Puri Buch, the former head of the Securities and Exchange Board of India (Sebi), according to a news report by NDTV. The Lokpal concluded on May 28 that the complaints, which largely stemmed from a Hindenburg Research report, were based on "presumptions and assumptions" and lacked any verifiable evidence.

Basis Of The Complaints

The complaints, including one lodged by Mahua Moitra, Trinamool Member of Parliament, last year, primarily relied on a report published by Hindenburg Research on August 10, 2024, according to NDTV report. This report, according to the Lokpal, was authored by a "known short seller trader whose focus was to expose or corner Adani Group of Companies." The Hindenburg report alleged that Buch and her spouse held interests in obscure offshore funds supposedly used in a money-laundering scheme involving the Adani Group. Both Buch and the Adani group had vehemently denied these claims, characterising them as an attack on the capital markets regulator's credibility and an attempt at character assassination.

Lokpal's Findings And Dismissal

The Lokpal's Wednesday order stated that the allegations were "not supported by any verifiable material and do not attract the ingredients of the offences to direct an investigation, therefore." Consequently, a six-member bench led by Lokpal chairperson Justice A. M. Khanwilkar disposed of the complaints. The Lokpal had previously indicated that the Hindenburg report alone couldn't be the sole foundation for action against Buch. The order further noted that even when complainants tried to present independent allegations, these were found to be "untenable, unsubstantiated, and bordering on frivolity.” 

Procedural Steps And Buch's Response

In November of last year, the Lokpal requested an explanation from Buch regarding the complaints. Buch, who served as Sebi chief from March 2, 2022, until February 28 this year, submitted her affidavit in December 2024, addressing the allegations. The Lokpal then provided both Buch and the complainants an opportunity for oral hearings in December and again in April. During these sessions, the complainants primarily cited sections 7 and 11 of the Prevention of Corruption Act, 1988, alleging that Buch had gained an undue advantage. Hindenburg Research's founder announced the firm's closure in January of this year.