Congress Alleges M&M Paid Rs2.59 Crore to Madhabi Puri Buch's Agora Advisory as Fee, Dhaval Buch Received Rs4.78 Crore
Moneylife Digital Team 10 September 2024
Contrary to a claim by Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI), the Congress party alleged that, as of March 2024, she owned a 99% stake in Agora Advisory Pvt Ltd and had received Rs2.95 crore from FY16-17 till FY23-24, except for two years. Agora Advisory received 88% of the fee income from Mahindra & Mahindra (M&M) group, while Dhaval Buch, the husband of Ms Buch, received Rs4.78 crore from M&M, Congress alleged. M&M, however, dismissed the allegations as ‘false and misleading in nature’. Other companies that used consultancy services from Agora Advisory and paid fees are: Dr Reddy’s Laboratories Ltd, Pidilite Industries Ltd, ICICI, Sembcorp and Visu Leasing and Finance Ltd.
 
In a statement, Pawan Khera, chairman of the media and publicity department at the Congress party says, "Although, in her response, Ms Buch had claimed that the two consulting firms set up by her in Singapore and India - one of which is Agora Advisory in India - became 'immediately dormant on her appointment with SEBI', the reality is that as of 31 March 2024, she still owns 99% stake in the Indian entity which has been actively providing advisory or consultancy services till date."
 
The Singaporean entity, Agora Partners Pte Ltd is exempt from disclosing its financial statements, Mr Khera says. "In FY16-17, FY19-20, to as late as FY23-24, as a whole-time member (WTM) of SEBI and later as its chairperson, Ms Buch received a total of Rs2.95 crores through Agora Advisory. (Exception years: FY17-18 and FY18-19)."
 
"Strangely, of the total Rs2.95 crores received by Agora Advisory, Rs2.59 crore has come from one entity alone - the Mahindra & Mahindra (M&M) group. It accounts for 88% of the total money that Agora Advisory received. If this was not shocking enough, the SEBI chairperson's husband - Dhaval Buch received Rs4.78 crore as income in a personal capacity from the M&M group. This is in addition to the Rs2.95 crore received by 'Agora Advisory' through its consultancy or advisory services," he added.
 
 
This, Mr Khera says, "comes at a time when his wife, as a WTM of SEBI, was adjudicating cases of the same group."
 
M&M group, however, dismissed the allegations as 'false and misleading in nature', saying that it had not at any point requested SEBI for any preferential treatment. 
 
In a regulatory filing, M&M says it hired Mr Buch after his retirement from Unilever and three years before Ms Buch was appointed as SEBI chairperson. "He has spent most of his time at Bristlecone, a subsidiary which is a supply chain consulting company. Mr Buch is currently on the board of Bristlecone."
 
 
M&M, however, says, "None of the five SEBI orders or approvals referenced in the allegations are relevant. Details are: three out of the five approvals or orders of SEBI do not pertain to the Company or any of its subsidiaries. One was a fast-track rights issue, which did not require any approval from SEBI. One was an order issued in March 2018, well before Mr Buch started working with the Mahindra group."
 
According to the information shared by the Congress party, apart from the M&M group, Agora Advisory also provided consultancy services to Dr Reddy's Labs, Pidilite Ltd, ICICI, Sembcorp and Visu Leasing and Finance Ltd, all listed on the stock exchanges and regulated by SEBI. 
 
"What kind of consultancy services does Agora Advisory provide? Are they financial in nature? Is the prime minister (PM) Narendra Modi aware of Ms Buch's ties to a conflicted entity? Is the PM aware that Ms Buch's spouse is receiving a substantial income from M&M Ltd after his retirement?" Mr Khera says.
 
Dr Reddy’s Lab says from October 2020 to April 2021, it engaged the services of Mr Buch of Agora Advisory for leadership coaching and paid Rs6.58 lakh as remuneration in line with what is paid to other coaches. "The assignment started and ended well before Ms Buch’s term as SEBI chairperson. Any suggestion that the company was treated differently by SEBI as a result of this would be baseless and malafide," it says in a regulatory filing.
 
In a regulatory filing, Pidilite says it engages with multiple partners and consultants who are renowned professionals in their respective fields. "As part of its routine requirements, the Company in FY19-20 had engaged Agora Advisory’s Mr Buch, a globally renowned supply chain and procurement professional, for his services in these areas. We further state that there have never been any enquiries or cases from SEBI vis-à-vis the Company."
 
Last month, US short-seller Hindenburg Research also alleged Agora Advisory is not dormant as claimed by Ms Buch, the SEBI chairperson, and she held a 99% stake in the company.  
 
Referring to a statement issued by the Buchs, the US short-seller says, "Per its latest shareholding list as of 31 March 2024, Agora Advisory is still 99% owned by Madhabi Buch, not her husband. This entity is currently active and generating consulting revenue. Furthermore, Ms Buch remained a 100% shareholder of Agora Partners Singapore until 16 March 2022, per Singaporean records, owning it during her entire time as a SEBI whole-time member (WTM). She only transferred her shares into her husband's name two weeks after her appointment as SEBI chairperson."
 
On Saturday, Hindenburg alleged that the SEBI chairperson had a stake in obscure offshore entities used in the Adani money siphoning scandal. 
 
Quoting whistle-blower documents, Hindenburg says, "We had previously noted Adani's total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani's relationship with SEBI chairperson, Madhabi Buch. Whistleblower documents show that Ms Buch, the current chairperson of SEBI, and her husband had stakes in both obscure offshore funds used in the Adani money siphoning scandal."
 
Quoting media reports about Adani group chief Gautam Adani's meeting with the SEBI chief, Hindenburg says, "What we had not realised: the current SEBI chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani."
 
It alleges that Ms Buch and her husband first appeared to have opened their account with IPE Plus Fund 1 on 5 June 2015 in Singapore, per whistle-blower documents. "A declaration of funds, signed by a principal at IIFL, states that the source of the investment is 'salary' and the couple's net worth is estimated at US$10mn (million)," Hindenburg says. 
 
While 'strongly' denying the allegations and insinuations made in the Hindenburg report, the SEBI chairperson and her husband Dhaval Buch say the US-based short-seller is attempting to attack SEBI's credibility and indulging in character assassination of the chairperson.
 
In a detailed statement, the Buchs say their investment in a fund promoted by IIFL Wealth Management was as Singapore-based private citizens and made two years before Ms Buch joined SEBI as a whole-time member. "The decision to invest in this fund was because the chief investment officer (CIO), Anil Ahuja, is Dhaval's childhood friend from school and IIT Delhi and, being an ex-employee of Citibank, JP Morgan and 3i Group Plc, had many decades of strong investing career. The fact that these were the drivers of the investment decision is borne out of the fact that when, in 2018, Mr Ahuja left his position as CIO of the fund, we redeemed the investment in that fund. As confirmed by Anil Ahuja, at no point in time did the fund invest in any bond, equity, or derivative of any Adani group company."
 
On 24 January 2023, the short-seller accused the Adani group of engaging in long-term stock manipulation and accounting fraud through a network of offshore entities.  
 
SEBI says the allegations (made by Hindenburg), ranging from using offshore investment funds to inflate stock price and non-disclosure of related party interest that Hindenburg first levied in its damning report against the Adani group in January 2023, have been 'duly investigated'.
 
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