India’s chief regulator earned revenue from potential rule violations, the documents show

Hindenburg Research claimed a conflict of interest in Buch’s investigations into the Adani Group because of his previous investments. The allegations against the Gautam Adani-led conglomerate, made in January last year, triggered a sharp drop in the share prices of flagship Adani Enterprises and other group firms, which later recovered, prompting an ongoing investigation by the Securities and Exchange Commission. Securities of India (SEBI).

Buch, in a statement on August 11, denied the allegations of conflict of interest and called them an attempt at “character assassination”.

Separately, the US-based short-cut seller in its latest report singled out two consulting firms operated by Buch and her husband – Singapore-based Agora Partners and India-based Agora Advisory.

Buch joined SEBI in 2017 and was appointed to the top position in March 2022. In those seven years, Agora Advisory Pvt Ltd, in which Buch holds 99% of the shares, earned a revenue of 37.1 million rupees (442,025 USD), according to public documents from the Companies Register, analyzed by Reuters.

Buch’s holdings potentially violate a 2008 SEBI policy that prohibits officials from holding an office for profit, receiving salaries or professional fees from other professional activities. Buch, in her statement, said the consulting firms were disclosed to SEBI and that her husband used these firms for his consulting business after he retired from Unilever in 2019. Buch and the SEBI spokesperson did not respond immediately to emails requesting comments.

Hindenburg, citing company records in Singapore, said Buch transferred all shares in Agora Partners to her husband in March 2022. However, according to company records for the financial year ending March 2024, Buch still owns shares in the Indian consulting firm .

The documents, reviewed by Reuters, do not detail the business undertaken by the consultancy, nor is there any information available to suggest that these revenues have any connection to the Adani Group.

Subhash Chandra Garg, a former top bureaucrat in the Indian government and a member of the SEBI board during Buch’s tenure, described her equity in the firm and its continued business operations as a “very serious” breach of conduct.

“There was no justification for her to continue to own the firm after she joined the board. He could not have been allowed even after making disclosures,” Garg said.

“This makes her position completely untenable at the regulator.”

Buch did not clarify whether he was granted a waiver to retain his stake in the Indian consulting firm. No specific question to her in this regard was answered.

Hindenburg’s accusations led to calls for Buch’s resignation, including from opposition leaders. A spokesman for the ruling Bharatiya Janata Party (BJP) called it a baseless attack.

According to Garg and a SEBI board member, neither she nor other officials made disclosures to the board about their business interests.

“There was a requirement to make annual disclosures, but the board members’ disclosures were not put before the board for information or review,” said the board member, who declined to be identified because information about disclosures to the board is not public.

“Certainly, no disclosure of members was discussed. Whether the disclosures were made only in front of Ajay Tyagi, the then chairman, I don’t know that,” Garg said.

Messages and calls to Tyagi about disclosures being made to him went unanswered.