The Lokpal of India has dismissed three high-profile complaints against Madhabi Puri Buch, the former Chairperson of the Securities and Exchange Board of India (SEBI), concluding that the allegations lacked merit, were unsubstantiated, and appeared to be politically motivated.
The complaints, filed shortly after the release of the second Hindenburg Report dated August 10, 2024, accused Buch of corruption, conflict of interest, and quid pro quo dealings during her tenure at SEBI. The allegations centered on her and her husband’s investments, consultancy associations, and regulatory decisions involving major corporate entities including the Adani Group.
Key Allegations and Lokpal’s Findings
1. Investment Conflict
It was alleged that Buch and her husband had invested in a fund linked to Adani Group entities under SEBI investigation, without making proper disclosures. The Lokpal, however, found that the investments were passive, disclosed, and bore no connection to any SEBI-regulated activities under Buch’s purview.
2. Quid Pro Quo Deals
Accusations of Buch’s firms receiving consultancy fees from entities like Mahindra, Blackstone, and Wockhardt—while they were being probed by SEBI—were found baseless. The Lokpal noted there was no credible evidence of any undue advantage or violation of regulatory ethics.
3. Stock Sale Timing
The complaint claimed that Buch unfairly benefited by selling ICICI Bank ESOPs at peak value while SEBI had open investigations against the bank. The Lokpal ruled the timing was coincidental, legally permissible, and unrelated to any internal SEBI deliberation.
4. Document Concealment
Buch was accused of withholding critical documents from the Supreme Court-appointed Expert Committee on Adani-related stock manipulation. The Lokpal found no verifiable evidence supporting this claim.
5. Improper Recusals
While Buch had recused herself from certain cases, complainants alleged she continued to exert influence. The Lokpal, however, found no proof of her interference, noting that SEBI’s institutional mechanisms ensured checks and balances.
Lokpal’s Judgment
In a comprehensive 36-page order, the Lokpal emphatically rejected the complaints:
“The allegations in the Complaint(s) are more on presumptions and assumptions and not supported by any verifiable material… These complaints are disposed of.”
The order stated that SEBI’s regulatory actions, including those involving the Adani Group, had already been scrutinized and upheld by the Supreme Court, and could not be reopened without new, credible evidence.
Adani Group’s Response
The Adani Group, while not a direct party in the complaints, was named in the allegations as a supposed beneficiary of regulatory favoritism. The Lokpal’s findings amounted to a full exoneration, stating:
“The effectiveness of the investigations and action taken by SEBI against the Adani Group of companies has commended to the Supreme Court. That cannot be reopened directly or indirectly…”
The Lokpal also dismissed the Hindenburg Report—on which the complaints were largely based—as unreliable:
“The complaint(s)… were essentially founded on the Hindenburg Report… that report by itself cannot be made the sole basis to escalate action…”
Political and Regulatory Implications
The complaints were strongly criticized by the Lokpal for attempting to sensationalize regulatory affairs and misuse anti-corruption mechanisms:
“The Complainant(s)… only to sensationalize or so to say politicize the matter, has inevitably trivialised the process before the Lokpal. It is nothing short of vexatious proceedings…”
The Lokpal’s dismissal of the complaints reaffirms the credibility of SEBI’s functioning under Buch and is seen as a significant institutional endorsement of due process and regulatory independence. Legal experts believe the decision will deter future politically motivated or speculative filings based on short-seller reports or media narratives.
With the Lokpal’s ruling, Madhabi Puri Buch stands fully cleared of all allegations. The case underscores the importance of verifiable evidence in public accountability processes and highlights India’s adherence to rule of law, even in matters involving high-profile regulatory and corporate actors.
“By reiterating SEBI’s institutional integrity and rejecting conflict of interest charges, the order sends a strong signal that India’s capital markets are robustly governed.”
This outcome is also being viewed as a vindication of India’s regulatory institutions amid increasing global scrutiny and attempts to influence domestic policy through external reports and market maneuvers.
