Cong raises SEBI chief's conflict of interest issue in LS, asks why govt did not act

The Congress on Monday levelled conflict of interest allegations against SEBI (Securities and Exchange Board of India) chairperson Madhabi Buch and claimed that Union finance minister Nirmala Sitharaman's "failure" to act decisively on the matter has not only tarnished the credibility of the government but also jeopardised the financial governance framework.

Attacking the government over the Adani issue during a discussion on the supplementary demands for grants in Lok Sabha, Congress MP and general-secretary (organisation) K.C. Venugopal said a joint parliamentary committee (JPC) must probe the entire matter, and alleged that this is a government "by Adani, of Adani, for Adani".

Venugopal said between 2017 and 2024, Buch allegedly received over Rs 16.4 crore from ICICI Bank while serving as a SEBI official regulating the bank. "This was five times her salary from SEBI, presenting a blatant conflict of interest," he said.

She received rental income from entities linked to a firm under SEBI investigation, said Venugopal, who also heads the Public Accounts Committee (PAC). "What does it mean sir, SEBI is investigating the company and the chairperson is renting out property to an entity linked to that company?" he asked.

Venugopal also alleged that the SEBI chairperson traded in securities worth of Rs 36.9 crore while holding access to unpublished price-sensitive information, which he said was a direct violation of the SEBI code of ethics.

She failed to disclose assets in Singapore and the US between 2017 and 2021 despite being obligated to do so, Venugopal said. Despite these allegations, the finance minister has neither initiated an independent inquiry nor taken any disciplinary action, he said. "Inaction undermines the government's claim of transparency and commitment to investor confidence," he said.

Posing questions to the finance minister, Venugopal asked why the finance ministry has not initiated any disciplinary and legal proceedings against the SEBI chairperson despite clear evidence of conflicts of interest that undermines the integrity of the regulatory body.

"Doesn't the finance minister take note, acknowledge and take responsibility for the damage to investor confidence, both domestic and foreign, due to the lack of timely action against the SEBI chairperson?" he asked.

Can the finance minister clarify whether the government is willing to accept responsibility for the uncertainty and volatility of stock market, stemming from the conflict of interest involving the SEBI chairperson, he also said. "What steps does the finance minister intend to take to ensure transparency and accountability in the SEBI leadership, especially in the light of the allegations?" Venugopal asked.

"Does the ministry believe that retaining the chairperson under such circumstances send a wrong signal to India's commitment to corporate governance and regulatory transparency?" he said. "The finance minister's failure to act decisively not only tarnished the credibility of the government but also jeopardised the national financial governance framework. What is the complicit interest of the government and the SEBI chairperson?"

The Congress MP also alleged that the Adani Group's name figured in stock manipulation and questioned how the SEBI chairperson could investigate that when "she is part of the scandal". He demanded that a JPC inquiry be initiated in the entire matter.

In India, 11 crore people are dependent on stock markets, most of them from middle-income groups, he said, adding that SEBI is entrusted with safeguarding the hard earned money of the Indian middle class, and any lapse or misconduct within SEBI is a direct reflection on the government.

The finance ministry is directly responsible for ensuring that individuals with unimpeachable integrity and ethical standards are appointed to this crucial regulatory body, Venugopal said. Several serious allegations have surfaced against the SEBI chairperson, indicating a severe breach of ethical and regulatory standards, he said. Venugopal also questioned why Sitharaman was not present in the House.

Hitting back at Venugopal, Union minister Kiren Rijiju said, "The person you are talking about again and again, Modi ji did not make him a crorepati, you made him a crorepati. We made unicorns... These ports and airports have been given by you, don't defame us."