The ICICI Bank on Monday stated that it has not paid a salary or granted Employee Stock Ownership Plan benefits to Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India, after she retired from the company in October 2013.

The statement came after the Congress, earlier in the day, alleged that Buch drew an income of Rs 16.8 crore from the ICICI Bank from 2017 to 2024, and said that this represented a conflict of interest.

This amount, the party alleged, was over five times the income of Rs 3.3 crore that Buch received from SEBI.

“During her employment with the ICICI Group, she received compensation in the form of salary, retiral benefits, bonus and ESOPs, in line with applicable policies,” said the ICICI Bank.

It added that under the bank’s Employee Stock Ownership Plan rules, the benefit “vest over the next few years from the date of allotment”.

“As per rules existing at the time of her ESOP grant, employees including retired employees had the choice to exercise their ESOPs anytime up to a period of 10 years from the date of vesting,” read the statement. “All the payments made to Ms. Buch post her retirement had accrued to her during her employment phase with the ICICI Group. These payments comprise ESOPs and retiral benefits.”

Congress’ allegations

During a press conference, Congress spokesperson Pawan Khera alleged that Buch held an office of profit while being a member of the market regulator, thus violating Section 54 of the SEBI Employees’ Service Regulations, 2001. He further claimed that her actions violated the market regulator’s Code on Conflict of Interest for Board Members.

The SEBI chairperson, however, said last month that she recuses herself from any proceedings involving the ICICI Group.

The Congress further alleged that Buch adjudicated complaints against ICICI and its affiliates, which it said amounted to a conflict of interest. The party claimed that this was an instance of quid pro quo favours, pointing to an exemption granted by the market regulator to the ICICI Group in a merger and acquisition case.

Khera on Monday asked Prime Minister Narendra Modi to state whether the Appointments Committee of Cabinet, which he heads, knew about these “shocking facts” about the SEBI chief. The Congress also asked the ICICI Bank if it made any declaration about Buch being paid a salary and being given Employee Stock Ownership Plan benefits while she was a member of the market regulatory authority.

The allegations come in the backdrop of allegations by United States-based short seller Hindenburg Research that Buch and her husband Dhaval Buch had “hidden stakes” in offshore entities tied to stock price manipulation and money laundering by the Adani Group.

Criticism about SEBI’s exemption to ICICI

The Congress’ allegations come amid SEBI facing criticism for its role in aiding the merger between ICICI Bank Limited and its subsidiary ICICI Securities, according to Bloomberg.

ICICI Bank Limited has a nearly 75% stake in ICICI Securities. In June 2023, ICICI Bank Limited announced its plan to take over ICICI Securities. The bank offered 67 of its shares for every 100 of its subsidiary’s.

A bidding process is mandatory to ensure a fair price, according to the guidelines set by the market regulator on buying out shares of a listed company and getting it delisted from stock exchanges.

However, an exemption to this rule is given when the listed company being bought out is a subsidiary of the acquirer and they are in the same line of business. Here, a vote is conducted for the shareholders of both companies after they are told the swap ratio.

As ICICI Bank Limited and ICICI Securities were not in the same line of business, the group asked SEBI for an exemption, for which approval was granted in June 2023, according to Bloomberg.

A vote was conducted in March among the shareholders of ICICI Bank Limited and ICICI Securities, where 72% of them voted in favour of the merger.

However, more than 100 public and non-institutional investors of ICICI Securities filed a class action suit in April with the National Company Law Tribunal against ICICI Securities on the delisting plan.

The shareholders alleged that ICICI Securities shared the personal data of its minority investors with the bank prior to the vote, Bloomberg reported. ICICI employees had contacted these investors. According to the bank, this was done to explain the transaction and maximise participation in e-voting.

SEBI, in response, said that the sharing of the data was not appropriate, according to Bloomberg. It said that there was “a clear conflict of interest” as the bank had a stake in the outcome of the vote. SEBI then issued an administrative warning to ICICI Bank Limited and ICICI Securities.

The shareholders also claimed that a skewed swap ratio had cost them more than $200 million.

However, both ICICI Securities and ICICI Bank claimed that the terms of the merger were determined by independent valuation experts, Bloomberg reported. It added that the pricing was found to be fair by multiple proxy advisory firms.

On August 10, the Bombay High Court 10 ordered SEBI to disclose the exemption letter granted to ICICI Securities. The court told the market regulator to provide this letter to Aruna Vinod Modi, an ICICI Securities shareholder who challenged the exemption.

It said that Modi was prohibited from sharing the letter with a third party.

Also read: SEBI chief did not recuse herself from Adani probe, says board member