New Delhi: While Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch had recently issued statements to deny the conflict of interest allegations levelled by Hindenburg Research for having held “stakes in both the obscure offshore funds used in the Adani money siphoning scandal”, there are several unanswered questions about her associations with other companies as well. Buch’s close connections with American private equity major Blackstone raise several questions about conflict of interest, reports The Morning Context. “Blackstone is heavily invested in India. It is the promoter of many companies in India. That [Buch] has recused herself from Blackstone matters isn’t enough given the amount of investment they have in India,” a veteran fund manager, requesting anonymity told The Morning Context. The Blackstone connection has ensured that Hindenburg’s allegations have continued to raise questions and have not slipped away from the headlines. As a result of the allegations, SEBI now will now have to deal with the fact that it has a chairperson who was a high-profile private sector executive before becoming a regulator and the probable conflict of interest that comes with this. Madhabi Puri Buch’s circle of influence is possibly a hindrance to her doing her job as regulator, capital market circles say While Buch had said in a statement that she had recused herself from all matters involving Blackstone, it is noteworthy that Blackstone, through its different subsidiaries, either owns or holds a significant stake in some major companies including Indiabulls Housing Finance (now Sammaan Capital), Aadhar Housing Finance, asset and wealth management firm ASK Investment Managers, hospital chain Care Hospitals and IT services provider Mphasis, reports The Morning Context. It is yet to be seen whether Buch has recused herself from all matters involving companies that Blackstone has a stake in and how many Blackstone companies find a place on that recusal list. So far, neither SEBI, nor Buch has made this list public. Back in February, SEBI had cleared an IPO of Aadhar Housing Finance, a company controlled by Blackstone, during the leadership of Buch. Between April and October 2019, Blackstone, through its subsidiary Epsilon Bidco Pte Ltd, acquired a 75% stake in Essel Propack Ltd (now named EPL Ltd). In July 2019, Dhaval Buch joined Blackstone as a senior adviser. “A major chunk of the Blackstone stake (51% of the 75%) was acquired from the Ashok Goel Trust in April 2019. Atul Goel is part of the leadership advisory board of Ashok Goel Trust. The trust continues to hold a significant 7.6% stake in EPL, but is now classified as a public shareholder. On 27 August 2021, Madhabi Puri Buch, as a whole-time member of SEBI, disposed of an insider trading case against Atul Goel and his company, E-city Hi-tech Projects,” says The Morning Context. This amounts to a big question mark over the recusal claim made by Puri-Buch in her statement.
After Hindenburg Allegations, SEBI Chief’s Blackstone Connection Raises New Questions: Report
As a result of the allegations, SEBI will now have to deal with the fact that it has a chairperson who was a high-profile private sector executive before becoming a regulator and the probable conflict of interest that comes with this.
