Updated at 12.45pm on 30 October 2024 to include statement issued by Anant Narayan, WTM, SEBI...Pawan Khera, chairman of the media & publicity department in the All India Congress Committee (AICC), on Tuesday
made fresh allegations against Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI) and whole-time member (WTM) Ananth Narayan. He alleges that the SEBI chairperson rented another one of her properties to Green World Buildcon and Infra Pvt Ltd, a company owned by individuals associated with Indiabulls.
"Ms Buch owns another flat in Mumbai. In 2021-22, she earned rental income from a property rented out to a company called Green World Buildcon and Infra. This company is owned by Mukul and Vipul Bansal. Mukul Bansal has a significant background with Indiabulls group, being part of its senior management and on the board of several related companies," Mr Khera says, adding, "Indiabulls group, where Mukul Bansal has been involved, 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 says, is a violation of sections 4, 7, and 8 of SEBI's code on conflict of interest for members of the board (2008).
According to Mr Khera, as an initial shareholder, Ms Buch has been associated with Predible Health Pvt Ltd and continued to hold shares in the company even after becoming a WTM of SEBI. "It was during FY21-22 (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."
One of the investors in Predible Health is Saint Vincent-based Jacesa Investments Ltd. "Jacesa Investments' name is listed in offshore leaks by Paradise Papers in 2017, shared by ICIJ. This implies that Jacesa Investments is compromised and needs to be investigated in detail," Mr Khera says.
The Congress party also levied allegations against Anant Narayan G, who has been a SEBI WTM since 10 October 2022. Mr Khera says, "After joining SEBI, he received Rs64.8 lakh in rent from a property he owns in Mumbai. The tenant is Thangam Vinod Rajakumar, a stockbroker hired by a brokerage firm called IMC India Securities, which is regulated by SEBI. This suggests a potential conflict of interest since Mr Narayan oversees the regulation of brokers by virtue of being a member of the market intermediaries regulation and supervision department (MIRSD)."
Further, Mr Khera says, Mr Narayan holds shares in Proud Securities and Credits Pvt Ltd (now Incred Capital), an unlisted company. "He (Mr Narayan) holds one lakh shares worth Rs2 crore (in Incred). Incred's valuation is over Rs8,800 crore, giving his stake a value of around Rs70 crore (0.76% of total equity)."
"Since Ananth Narayan is a WTM 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," Mr Khera says.
Incred, as a market participant, specialises in portfolio management services, alternative investment funds (AIF), and pooled investments and may have stakes in various companies. "Given this, how can Mr Narayan remain impartial when dealing with cases involving the specific companies that are in the portfolios of Incred, considering his financial interest in Incred? Has he recused himself from any such cases?" Mr Khera asks.
Earlier, stepping up his attack over conflicts of interest allegations against the SEBI chief, Congress leader Rahul Gandhi on Monday alleged it is clear that Ms Buch is 'protecting Adani's money, his valuation and reputation', and asked who is protecting her and why.
Mr Gandhi, the leader of opposition (LoP) in the Lok Sabha, also said the current regime is no longer merely encouraging monopolies but actively concentrating the nation's wealth in the hands of a few.
He made the remarks
in his post along with a video featuring him and Mr Khera in which they talk about the alleged conflicts of interest of SEBI chief Buch.
UPDATE:
In a statement, Mr Narayan, the SEBI WTM, says industry professionals entering regulatory roles can be expected to bring in some accumulated assets and investments. "In my case, I have ensured that all such assets and investments are fully disclosed to SEBI and any potential conflicts are preemptively managed through disclosure and recusal. I will continue to strictly adhere to all SEBI Regulations and Code of Conduct."
Here is the statement issued by Mr Narayan...
Before joining SEBI in 2022, I worked in international banking and financial markets for over twenty-four years till 2017 and then moved into academia in 2018. During my banking and markets career as a salaried professional, I earned and accumulated legitimate income and assets, for which appropriate income tax returns (ITRs) have been consistently filed over the years.
It appears that some parts of my ITR for FY23-24 - which is otherwise not public - have been accessed and selectively misinterpreted to insinuate some grave, hurtful, and baseless charges. In this regard, I wish to clarify the following:
Disclosure of Assets: All my investments and assets, held singly or jointly, were fully disclosed to SEBI when I joined SEBI in October 2022 and regularly thereafter.
Rental Agreement: The rental agreement in question for a property jointly held with my wife (my share being 50%) was executed at arm’s length with an individual who happens to be employed by a stockbroker. All of this (including the rental agreement and the broking connect) was fully and proactively disclosed to SEBI. Along with the full preemptive disclosure, I have recused myself from all matters pertaining to this stockbroker, and no such matters have ever come before me.
Holdings in Proud Securities: I legitimately acquired 100,000 shares in Proud Securities (a company started by a former banking colleague) in October 2018, well before joining SEBI. As with other investments, this holding was disclosed to SEBI immediately after I joined in October 2022 and regularly thereafter. As an aside, this holding represents much fewer shares in Incred Capital and is of far less value than has been claimed. As with all other disclosures to SEBI, appropriate recusals are also in place for these entities, and no such matters have ever come before me.
