Winning Bizness Desk

Mumbai. Congress leader Rahul Gandhi accused India’s financial and political system of harboring an "Adani Protection Syndicate" claiming that the Syndicate is working to protect Adani Group’s interests, with SEBI Chairperson Madhabi Puri Buch allegedly pressuring government officials and possibly manipulating regulatory mechanisms to favor the group. Gandhi’s remarks came on October 28, in a video on his X (formerly Twitter) handle, where he discussed the matter with Congress spokesperson Pawan Khera. The Supreme Court instructed SEBI to form a committee to review the allegations. However, Gandhi’s recent video suggests that individuals close to Buch were part of the review process, raising questions about the committee’s objectivity.

Conflicts of interest surrounding SEBI Chief

In the 4-minute, 39-second teaser video, Gandhi and Khera discuss alleged conflicts of interest surrounding SEBI Chief Buch, claiming her actions might compromise retail investors' safety. They suggest Buch may be influenced by interests within the Adani Group, casting doubts over SEBI’s ability to impartially safeguard market integrity.

Congress’s Ongoing Concerns About Adani and SEBI

Congress’s concerns about the Adani Group and SEBI emerged in early 2023 after a report by U.S.-based Hindenburg Research alleged that Adani had manipulated stock prices via offshore entities. The report implicated SEBI’s top leadership, including Chairperson Buch, who, according to Hindenburg’s August 2024 report, might have a vested interest in offshore firms linked to Adani Group. Though SEBI cleared Adani of these allegations, questions regarding Buch’s impartiality lingered, and the case reached the Supreme Court.

Key Points from Rahul Gandhi and Pawan Khera’s Discussion

1. Unlisted Shares Allegations: In the video, Khera claims a whistleblower informed him that Buch was allegedly dealing in unlisted shares of companies, which raised ethical questions given her role as SEBI Chairperson. Khera stated that such activities were "unusual and concerning."

2. Conflict of Interest with Startup Funding: Gandhi and Khera also raised concerns over government startup funding provided to "Predible Health Private Limited," a company founded by Buch. Khera pointed out that government-backed funds, in addition to Rs 16 crore in ICICI Bank loans, had been directed to this startup. This connection between Buch’s startup and her role in SEBI is being questioned as a potential conflict of interest.

3. Allegations of Favoritism in Committee Appointments: Khera alleged that individuals close to Adani and Buch were appointed to the SEBI review committee, tasked by the Supreme Court to investigate Hindenburg’s claims. Khera suggested that these appointments were made to clear Adani Group of allegations rather than conduct an impartial investigation. He argued that this compromised SEBI’s ability to protect retail investors.

SEBI Chair Buch Absent from Key Oversight Meeting

Separately, SEBI Chairperson Madhabi Puri Buch did not attend a Public Accounts Committee (PAC) meeting on October 24, citing personal reasons. The PAC, led by Congress leader K.C. Venugopal, planned to review SEBI’s operations, but the absence of Buch and other SEBI officials postponed the meeting. This marks the second time Buch has missed a PAC session, prompting questions about her role and SEBI’s transparency.

Broader Implications for the Adani Group and SEBI

Rahul Gandhi’s comments highlight the growing scrutiny on the Adani Group and SEBI amid accusations of conflicts of interest and potential manipulation. As the opposition mounts pressure on regulatory bodies, calls for transparency and oversight within SEBI are likely to intensify, especially with accusations of favoritism and financial influence hanging over its leadership.