Parl panel calls Sebi chief Buch on Oct 24 amid Adani-Hindenburg row | News on Markets

In a significant move, the Public Accounts Committee (PAC) of Parliament has called for a review of the performance of top regulatory authorities in India. The heads of two major regulatory bodies—Securities and Exchange Board of India (Sebi) and the Telecom Regulatory Authority of India (TRAI)—are set to appear before the PAC on October 24 for a briefing on their functioning.

Sources indicate that the chairpersons of Sebi, Madhabi Puri Buch, and TRAI, Anil Kumar Lahoti, will likely be present for the session. Top officials from the Ministry of Finance (Department of Economic Affairs) and the Ministry of Communications have also been summoned to provide insights on the performance review of these key regulatory bodies, which were established by Acts of Parliament.

Allegations Against Sebi Chief Madhabi Puri Buch

The PAC’s meeting comes in the wake of serious allegations raised against Sebi chief Madhabi Puri Buch and her husband, Dhaval Buch, by US-based research firm Hindenburg Research. The allegations center around the couple’s alleged financial links to the Adani Group. Hindenburg’s report claimed that the Buchs had stakes in offshore entities related to the Adani Group, raising concerns about potential conflicts of interest.

Hindenburg further criticized Sebi for its alleged inaction, stating that 18 months after the release of its report on the Adani Group, Sebi had shown a “lack of interest” in investigating the charges against Adani. These accusations have sparked a political uproar, with the Congress party leading a nation-wide protest in August, calling for Madhabi Puri Buch’s resignation.

Both the Buchs and the Adani Group have denied any wrongdoing. Madhabi Puri Buch, in particular, has refuted the claims made by Hindenburg, stating that there is no truth to the allegations. However, the controversy has drawn significant attention, and the upcoming PAC meeting will likely focus on the functioning of Sebi under Buch’s leadership.

PAC’s Official Agenda

The PAC’s agenda for the October 24 meeting includes two critical areas of focus:

Performance Review of Regulatory Bodies Established by Act of Parliament, involving the Ministry of Finance and Sebi.

Performance Review of the Department of Telecommunications and TRAI, to assess the functioning of regulatory frameworks in the telecom sector.

According to sources, it is common practice for chiefs of institutions to personally attend parliamentary panel briefings when summoned. While representatives from the Ministry of Finance and Communications will be present, it is expected that the chiefs of Sebi and TRAI will also attend to provide oral evidence.

Political Repercussions

The PAC’s review of regulatory authorities comes at a politically sensitive time. The Congress party has been vocal in its criticism of the alleged ties between Madhabi Puri Buch and the Adani Group, which they argue has compromised the integrity of India’s financial regulatory system. The party continues to demand Buch’s resignation, framing the issue as part of a broader concern about corporate governance and regulatory oversight in the country.

In contrast, supporters of the Buchs and the Adani Group claim that the allegations are politically motivated, designed to weaken the credibility of regulatory institutions. The upcoming PAC meeting will likely be a key moment in addressing these concerns.

Conclusion

As the October 24 PAC session approaches, the scrutiny on Sebi and TRAI will intensify. The review of these regulatory bodies could have far-reaching implications, both for the institutions themselves and for the broader political landscape. With serious allegations against Sebi’s leadership in the spotlight, the session promises to be a pivotal moment in the ongoing debate over the integrity and effectiveness of India’s regulatory authorities.

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