Hindenburg-Adani Case: Ex-finance secretary EAS Sarma requests Nirmala Sitharaman to probe SEBI chief Madhabi Buch

EAS Sarma, former secretary to ministries such as power and finance, has written a letter to Union Finance Minister Nirmala Sitaraman, urging her to start a judicial probe into the Hindenburg Research allegations against SEBI chief Madhabi Puri Buch. 

In his letter, Sarma wrote that Madhabi's 'conflict of interest' with Adani Group forced Sebi to conduct an impartial probe into allegations made by the US short-seller.  

PTI quoted Sarma as saying, "If the accusations made by Hindenburg are factually found to be correct, all investigations conducted during the last few years by the stock market regulator on external manipulation of stock market indices by a few corporate entities through their benami agencies need to be subject to a re-investigation."

Sarma has urged the government to request the Chief Justice of India (CJI) to nominate a senior member to head an inquiry commission to probe the case. He said that such a probe would uphold public trust in the regulatory body (Sebi).

"Such accusations should wake up the powers that be to refrain from interfering with the independence of any statutory institution for that matter, as such interference will erode public trust and credibility of that institution," he added. 

Before Sarma wrote to the Finance Minister, Rahul Gandhi, Leader of Opposition in Lok Sabha, had also demanded a Joint Parliamentary Committee (JPC) inquiry into charges against the Sebi chief. 

Gandhi had questioned Centre that if something were to go wrong and investors were to lose their hard-earned money, "who would be held responsible?" 

“Is the Prime Minister of India responsible? Is Madhabi Buch responsible, or is Mr Adani responsible? It’s slowly becoming crystal clear why PM [Narendra] Modi is against a JPC looking into this matter,” said Gandhi. 

Amid such allegations, some global investors are also urging Madhabi to step down from Sebi's top post to maintain the regulatory body's sanctity. 

"Some people associated with SEBI have a conflict of interest. We have to assume that these allegations are true. If they are true then the people involved have to resign, there is no question about this," Mark Faber, the publisher of ‘The Gloom, Boom & Doom Report’ told WION.

Earlier, economist and tech analyst Daniel Geltrude also suggested that Madhabi should resign. He said that corruption involving offshore funds can erode foreign inflows from India.

(With inputs from agencies)