Ex-finmin secretary writes to FM, seeks judicial probe on Hindenburg report

Former bureaucrat E.A.S Sarma has written to Union finance minister Nirmala Sitharaman seeking a judicial probe into allegations of a conflict of interest preventing SEBI (Securities and Exchange Board of India) chairperson Madhabi Puri Buch from probing charges against the Adani Group.

Calling the allegations levelled by US short-seller Hindenburg Research against Buch highly disturbing, he said an agency other than SEBI and independent from the government and its agencies should ascertain the factual accuracy of the accusations.

Hindenburg had on Saturday alleged that Buch and her husband Dhaval Buch had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani — elder brother of group chairman Gautam Adani — to round-trip funds and inflate stock prices. Buch has denied the allegations.

Sarma, who served as secretary in the ministry of finance in 1999-2000, asked if the regulator made a straightforward disclosure to the finance ministry of the possible conflict of interest and if the Cabinet Committee on Appointments was kept informed.

"If the accusations made by Hindenburg are factually found to be correct, all investigations conducted during the last few years by the stock market regulator on external manipulation of stock market indices by a few corporate entities through their benami agencies need to be subject to a re-investigation," he said.

He demanded that the government requests the Chief Justice of India to nominate a senior member of the judiciary to head an inquiry commission as only such an appointment "can serve the cause of upholding the public trust and eliciting public trust".

"The Inquiry Commission's proceedings should be in the public domain and its report submitted to the Parliament within a time-bound manner," he added. "Such accusations should wake up the powers that be to refrain from interfering with the independence of any statutory institution for that matter, as such interference will erode public trust and credibility of that institution."