Madhabi Buch, the chief of the Securities and Exchange Board of India, continued to earn revenue from her consultancy firm during her seven-year term in the markets regulator, potentially breaching rules for regulatory officials, Reuters reported on Friday.

American short-seller Hindenburg Research had flagged in its report on August 10 that Buch had set up two firms before she joined SEBI: Agora Partners, an offshore Singaporean consulting firm, and an Indian consulting business, Agora Advisory.

In her response to the report, Buch and her husband Dhaval claimed that the two firms had become “immediately dormant” on her appointment as a member of SEBI. “These companies [and her shareholding in them] were explicitly part of her disclosures to SEBI,” the Buchs said in their statement on August 11.

Madhabi Buch had joined SEBI in 2017 and was appointed as its chief in March 2022.

According to a 2008 SEBI policy, officials of the markets regulator are prohibited from holding an office of profit, receiving salary or professional fees from other professional activities, Reuters reported.

As first reported by Scroll, documents filed with the Registrar of Companies revealed that Madhabi Buch continued to hold 99% stake in Agora Advisory till March 2024, even though she had stepped down as the director of the firm in 2017. Her husband, Dhaval Buch, had replaced her.

Agora Advisory was active between 2019 and 2024 and had made Rs 3.63 crore in revenue from its operations, Scroll had reported citing documents filed with the Registrar of Companies.

Also read: SEBI chief claims her firms went ‘dormant’. Documents show otherwise

Madhabi Buch had claimed in her statement on August 11 that her husband used the two firms for his consulting business after retiring from Unilever in 2019.

On Friday, Reuters reported citing the documents filed with the Registrar of Companies that between 2017 and 2024, Agora Advisory was active and made $442,025, or Rs 3.7 crore, in revenue from its operations.

According to the Hindenburg report, Madhabi Buch held 100% stake in Agora Partners till March 2022. She transferred the shares to her husband two weeks after she was appointed as the chairperson of SEBI.

Company records for the financial year 2023-’24 show that Madhabi Buch still holds shares in Agora Advisory, Reuters reported.

Subhash Chandra Garg, India’s former finance secretary and a SEBI board member during Madhabi Buch’s tenure, told Reuters that “there was no justification for her to continue to own the firm” after she joined the regulator.

“She could not have been allowed even after making disclosures,” Garg was quoted as saying. “This makes her position completely untenable at the regulator.”

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