“You have to be careful…”: What Raghuram Rajan has to say about the SEBI chief Madhabi Puri book controversy

Former Reserve Bank of India Governor Raghuram Rajan acknowledged that allegations against someone of SEBI Chairman Madhabi Puri Buch’s stature could crop up anywhere, but it was really important that the regulator address the allegations point by point.

Speaking to news agency PTI, Rajan said, “One has to be careful here as anyone can make allegations at any time.” He added that it is important to address these allegations in detail.

“When there is sufficient investigation into the allegations, it is really important for the regulator to say, ‘Caesar’s wife must be above suspicion,’ which means dealing with the allegations point by point,” he said. when asked about the increasing allegations against Buch.

US-based short seller Hindenburg Research accused Buch of a conflict of interest. Their report said that Buch and her husband Dhaval Buch invested in offshore funds controlled by Vinod Adani, the brother of Adani Group chairman Gautam Adani, whom the short seller accused of investing in funds and inflation of manipulating share prices, which triggered an investigation by SEBI. The supervisory authority, headed by Buch, had given the whole thing a free hand.

Rajan stressed the importance for regulators to be credible, stressing that this helps the country, the markets and the regulators themselves. He said regulators need to be transparent and that the more detailed the investigation becomes, the more detailed the response needs to be, the news agency said.

Buch was also accused by the Congress party of trading in listed securities and selling employee stock options of her former employer ICICI Bank during her time at SEBI. It said certain companies had sought advisory services from Agora Advisory when Madhabi Puri Buch was serving as a full-time director of SEBI.

Additionally, around 500 SEBI employees wrote to the finance ministry last month saying there was tremendous pressure on the regulator, resulting in a “stressful and toxic work environment.”

Madhabi Puri and Dhaval Buch have denied all allegations and said they complied with all SEBI regulations and disclosed details of their holdings and investments to the regulator when they joined in 2017.