SEBI review on agenda, parliamentary watchdog likely to summon Madhabi Buch

The PAC, headed by Congress senior leader K C Venugopal, took the unusual step to include a suo motu subject – performance review of regulatory bodies established by Act of Parliament – at its last meeting on August 29. The agenda for the year was notified earlier this week.

This comes amid the growing Opposition chorus for a parliamentary probe into Hindenburg Research’s allegation that Buch and her husband, Dhaval Buch, had “stake in obscure offshore entities used in Adani money siphoning scandal”.

In response to the allegations made by Hindenburg, a joint statement by Buch and her husband said that “the investment in the fund referred to in the Hindenburg report was made in 2015 when they were both private citizens living in Singapore and almost 2 years before Madhabi joined SEBI, even as a Whole Time Member”.

Buch became a Whole Time Member in SEBI in 2017 and its Chairperson in March 2022.

“SEBI has strong institutional mechanisms of disclosure and recusal norms as per the code of conduct applicable to its officers. Accordingly, all disclosures and recusals have been diligently followed, including disclosures of all securities held or subsequently transferred,” the joint statement stated.

The Adani Group denied the allegations made by Hindenburg and called them “malicious, mischievous and manipulative”.

“The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing. We remain steadfastly committed to transparency and compliance with all legal and regulatory requirements,” the Adani Group said in the statement.

The Congress held a nationwide protest last month over the Hindenburg report and sought the removal of Buch from the post of SEBI chairperson.

Sources said the PAC, which is expected to meet two or three times this month, may summon the SEBI chief in September itself. Its next meeting is scheduled for September 10 and the agenda listed is “Briefing by Audit followed by Oral evidence of the representatives of Ministry of Jal Shakti (Department of Drinking Water & Sanitation) on the subject ‘Performance Audit on National Rural Drinking Water Programme (Jal Jeevan Mission)’ based on C&AG Report No. 15 of 2018.”

Sources said with a number of its members suggesting to take up subjects other than the pending ones before it, the committee chairman has agreed to include “performance review of regulatory bodies established by Act of Parliament” and a review on “levy and regulation of fees, tariffs, user charges etc. on public infrastructure and other public utilities” suo motu, according to the notification.

The 22-member PAC has 15 MPs from Lok Sabha and seven from Rajya Sabha. Other than Venugopal, it has senior BJP leaders Ravi Shankar Prasad, Nishikant Dubey, K Laxman, Anurag Thakur, Jagdambika Pal and Sudhanshu Trivedi as its members. Former Union Minister T R Baalu, T Shiva (both DMK), Shaktisinh Gohil, Amar Singh and Jai Parkash (Congress), C M Ramesh, Aparajita Sarangi, Ashok Chavan, Tejasvi Surya (BJP), TMC leaders Sougata Roy and Sukhendu Shekhar Ray, Dharmendra Yadav (SP), Magunta Sreenivasalu Reddy (TDP), V Balashowry (JanaSena) Praful Patel (NCP) are also its members.

The PAC, one of the most significant parliamentary panels that audits the revenue and expenditure of the government, usually makes a selection of Audit Paragraphs included in the various reports of CAG for in-depth examination. In addition, the Committee can also select one or more suo motu subjects for in-depth examination during the year.

After holding deliberations and taking note of the time available at the disposal of the panel, the Committee selects the most important subjects/paragraphs on which oral examination is to be conducted.

“However, the decision to examine the regulatory bodies is rare. It did not happen in the recent past,” said a source familiar with the functioning of parliamentary bodies.