SEBI fracas: Fresh posers to the PM, FM and Madhabi Puri Buch

Even as the union government, SEBI, the prime minister and the finance minister maintain their deafening silence on the SEBI saga and allegations of the regulator’s complicity with the Adani Group, the Congress on Tuesday, 29 October, raised fresh questions suggesting conflicts of interest.

At a press conference in Delhi, the party's media and publicity department in-charge Pawan Khera raised the following questions:

• Why did Madhabi Puri Buch rent out her property to a firm associated with Indiabulls, which is regulated by SEBI and has been under the SEBI’s scanner for various irregularities?

• Why did Madhabi Buch hold shares in a conflicted entity that has dubious connections revealed in the Paradise Papers?

• Why did a SEBI whole-time member since 2022, Mr Ananth Narayan, rent out his property to a stockbroker regulated by SEBI?

• Why does Mr Narayan hold shares in a company that is also a major financial service provider regulated by SEBI?

"In 2021–22, the SEBI chief earned rental income from a property she let out to a company called Green World Buildcon and Infra. This company is owned by Mukul and Vipul Bansal. Mukul Bansal has been part of the senior management of the Indiabulls group and on the board of several related companies," Khera told the media.

He added, "Indiabulls Group has faced several cases with SEBI, with multiple adjudication orders and regulatory actions between 2021 and 2022. Besides SEBI actions, the company has also been involved in cases before other regulators and courts, and SEBI has provided affidavits in those cases."

This, the Congress leader claimed, is a violation of SEBI's own code on conflicts of interest for members of the SEBI Board, a code adopted by it in 2008.

Puri Buch, the Congress leader alleged, was associated with Predible Health Pvt. Ltd as a shareholder and continued to hold shares in the company even after becoming a whole-time member of SEBI in 2017.

"It was during FY 2021–22 (that) she sold the shares to a US company, Nference Inc., making a return of about 226 times in five years. Further, Predible Health was a startup company, which received funds under the Startup India initiative of the Government of India," Khera alleged.

What is more, one of the investors in Predible Health has been Saint Vincent-based Jacesa Investments Ltd, which figured in the Paradise Papers and calls for a thorough investigation.

He also alleged that Ananth Narayan G., who has been a SEBI whole-time member since 10 October 2022, received rental income even after becoming a whole-time member from a stockbroker named Thangam Vinod Rajakumar, hired by brokerage firm IMC India Securities, regulated by SEBI. “Since Mr Narayan oversees the regulation of brokers by virtue of being a member of the market intermediaries regulation and supervision department (MIRSD), there is a potential conflict of interest,” said Khera.

Narayan, he said, also holds shares in Proud Securities and Credits Pvt. Ltd (now Incred Capital), an unlisted company: "He holds 1 lakh shares worth Rs 2 crore (in Incred). Incred's valuation is over Rs 8,800 crore, giving his stake a value of around Rs 70 crore (0.76% of total equity)."

"Since Ananth Narayan is a [whole-time member] of SEBI, and Incred Capital is a market participant regulated by SEBI, holding shares in Incred presents a conflict of interest. This raises the question of whether the selection committee was aware of Mr Narayan's shareholding in Incred at the time of his appointment," Khera continued.

Congress president Mallikarjun Kharge had his own statement on the SEBI mess that he shared on X, directed at prime minister Narendra Modi too:

.@narendramodi ji,

You cannot shield the rot created in SEBI under the Chairperson appointed by you.

The continuing barrage of expose makes her position untenable.

You have destroyed the sanctity of SEBI - India's market regulator, painstakingly created over the years,…

— Mallikarjun Kharge (@kharge) October 29, 2024