New Delhi: The chief of market regulator Securities and Exchange Board of India (Sebi), Madhabi Puri Buch, is unlikely to get an extension as the finance ministry on Monday invited applications for the post, seeking an appointment of its new chairman for the regulator. The government has initiated the process in a notification to find a successor for Buch, who was reportedly involved in an alleged conflict of interest row. The notification comes a month ahead of Buch’s three-year tenure ending on February 28, 2025.
Buch’s immediate predecessors, IAS officer Ajay Tyagi, and UK Sinha, had both got extensions as the Sebi chief with their mandated three-year term, with Tyagi serving for four years and Sinha serving for six years in the chair as well. The ministry also said that the eligible applicants can apply for the position by February 17, signalling the government’s intent to have a new person as the Sebi chief after Buch’s tenure and she turned 60 this month. Sinha was an exception who was initially appointed for 5 years and thereafter got an extension for 1 more year (February 18, 2011, to March 1, 2017), making him the second longest-serving Sebi chief.
During her tenure, Buch was faced with a slew of allegations — initially from short-seller Hindenburg and later the Opposition Congress party — regarding her investments in offshore funds linked to the Adani Group, code of conduct violations. Further, a section of Sebi employees had accused her of creating a ‘toxic work environment’ though that matter has now been resolved.
The Department of Economic Affairs under the Finance Ministry also said that the appointment would be for five years or till the candidate attains 65 years of age. Last date to file applications is February 17. The chairman should be a person who does not and will not have any such financial or other interests that are likely to prejudicially affect his function as the chairman,” the department said in an advertisement issued on Monday.
It is, however, noted that a similar clause was there last time as well when the government invited applications for Sebi chief in October 2021. As per the latest advertisement issued, it said that the candidate should have high integrity, eminence and reputation preferably above 50 years with more than 25 years of professional experience.
This time the selection process has been initiated just a month before the end of the current chief's tenure, unlike last time when it started four months prior. “The candidate is also required to have a ‘shown capacity in dealing with problems relating to securities markets, or has special knowledge or experience of law, finance, economics, accountancy,’ which in the opinion of the central government shall be useful to the board,” the advertisement said.
Buch assumed charge at the helm of Sebi on March 2, 2022, for a period of three years. She made history as the first woman to lead the market regulator as well as the first private sector individual to hold the position. She served as a whole-time member of Sebi from April 2017 to March 1, 2022. Although,
Buch in her tenure made significant strides in areas like faster settlements in equities, enhanced FPI disclosures and increasing mutual fund penetration, the last year of her tenure saw heightened controversy, when she battled a series of allegations by short-seller Hindenburg and the Congress party, while simultaneously dealing with in-house employee protests against ‘toxic work culture’.
In August last year, Buch faced pressure to resign after the US-based short-seller Hindenburg Research accused her of having a conflict of interest that prevented a thorough examination of manipulation and fraud claims at the Adani Group. Hindenburg accused Buch and her husband, Dhaval Buch, of investing in offshore entities that were allegedly part of a fund structure in which Vinod Adani -- the elder brother of Adani group founder chairman Gautam Adani -- also had investments.
However, Buchs had denied the allegation, saying the investments were made before she joined the regulator and she had complied with all disclosure requirements. Hindenburg earlier this month announced shutting down its business. The government, on its part, did not publicly say if it had sought an explanation from Buch.
As per the advertisement, the new Sebi chairperson will receive a pay equivalent to a secretary to the government of India which is Rs 5,62,500 per month (without house and car). “The government will appoint the Sebi chairperson on the recommendation of the Financial Sector Regulatory Appointments Search Committee (FSRASC). The committee is also free to recommend any other person who has not applied for the post on the basis of merit,” it added.
