Gossip & Tales: Sebi Chief Talks Tough After Hindenburg
Madhabi Puri Buch is likely to have survived the Hindenburg storm as the government is no more likely to seek her resignation
Amidst the lull following the Hindenburg storm, the incumbent Sebi chief Madhabi Puri Buch recently met Public Interest Directors (PIDs) of key market infrastructure institutions like depositories and stock exchanges. It was her first such meeting after the notorious short seller Hindenburg levelled allegations of 'conflict of interest' against the SEBI chief earlier this month. The charges had kicked up such a storm that the opposition parties led by Congress demanded her resignation and the government too was perceived to have abandoned her. But like the trees that take deeper roots in the storms, the SEBI chief has not only survived the fury, but is rumoured to likely win another extension in March 2025 when her current term expires. Most important is the speech that Ms Buch gave to the PIDs present in the meeting: "You all must be surprised to hear me speak today after the Hindenburg allegations and the media stories. But like the army in a battle, you should always expect fire from the other side. That's why in my job, I'm not too worried about the allegations, since I was born in a family, whose members were part of the armed forces," she told the PIDs as per the grapevine. Not now, but Ms Buch has been on a war-path (if one goes by her approach to market regulations) ever since she got appointed at SEBI. The battle only intensified when she took charge as Sebi chief in March 2022. But does a regulatory need to be a warrior, always?
Usha's U-turn
Former RBI Deputy Governor Usha Thorat is likely to have excused herself from the post of chairperson of a crucial committee related to India's stock exchanges. SEBI's move to hurriedly get Ms Thorat to head a Committee on Settlement Guarantee Fund of Stock Exchanges had raised eyebrows with regard to an otherwise routine appointment, on two counts: the timing of announcement and choice of candidate. Ms Thorat is the wife of Yashwant Thorat, who after retiring as the Chairman of NABARD in November 2007, was made the CEO of Rajiv Gandhi Foundation and remained in that post for well over a decade. Rajiv Gandhi Foundation is a private trust of the Gandhi Family, whose chairperson is Sonia Gandhi and board members are Rahul and Priyanka Gandhi and P Chidambaram. Thus to be appointed as the CEO of Rajiv Gandhi Trust means, Thorat was a member of the inner circle of trusted lieutenants of the Gandhi Family. His wife Usha Thorat was appointed as the deputy governor of RBI when Congress was in power and P Chidambaram and Dr. KP Krishnan were heading the finance ministry. Not only that, Thorat was also made the NSE board member when Ravi Narain and Chitra Ramkrishna ruled the roost (in the UPA era) and KPK held sway over Sebi. To the surprise of many, Sebi announced Thorat's appointment as the chief of the committee, late in the evening on June 4, the day when India's national election results were announced. PM Narendra Modi led BJP was seen falling short of the majority mark to form the government. As per the grapevine, in such a scenario, Ms Thorat's hurried appointment clearly sent a signal that some in Sebi lacked trust in PM Modi's return to power and were hence making appointments of people known to be close to the Gandhi Family. With PM Modi now seen in full control the scenario has again changed and hence seems the U-turn. Committee on stock exchanges will be handled by former Sebi whole time members and CDSL board members.
More Delays For NSE IPO?
IPO of India's largest stock exchange NSE seems to be on a suspended animation despite its board this week seeking a no-objection certificate from SEBI to file the draft prospectus for the issue. Rumours go that Sebi is refusing to grant any such NOC to the NSE for its IPO. On the one side, while BSE and MCX are the two listed stock and commodity exchanges in India and CDSL is a listed depository, the incumbent regime in Sebi seems against listing of more market infrastructure institutions. NSE's IPO has faced delays in the wake of the co-location scam that rocked the exchange between 2010 and 2015, even when the exchange under the new MD and CEO Ashish Chauhan has shown its willingness to pay the hefty fine imposed by SEBI and move on. Meanwhile, the share price of NSE has reached around Rs 6000 per share in the unlisted space taking the exchange's valuations to over Rs 2 lakh crores (approximately over $25 Billion).
NSDL MD CEO Moving Out?
Not only NSE but Sebi is also holding back the IPO of another depository NSDL since it has been issued few show cause notices by the regulator. After the show cause notices were issued and NSDL's IPO too has been delayed indefinitely, the incumbent MD and CEO of the depository Ms Padmaja Chundru has expressed her desire to step down due to the road blocks. But the approval for the appointment of NSDL's new MD and CEO to replace Ms Chundru too is in the limbo, as the names suggested for the post by the board of the company twice to Sebi have not been approved. There are talks among experts that Sebi does not seem to be allowing IPOs of market infrastructure companies on the back of reasoning that large market infrastructure companies may not be able to adopt to regulatory changes fast since they have a lot of explaining to do to their shareholders as a listed company with regard to the rational for the changes. Due to this, Sebi is unlikely to give approval for the IPOs of NSE and NSDL in the near future, unless there is a change of heart.
CARE Health Insurance MD CEO Under Regulatory Scanner?
The role of Anuj Gulati, founder and MD and CEO of CARE Health Insurance, is likely to have come under the scanner of insurance sector regulator IRDA. This is after CARE issued hefty Employee Stock Options (ESOPs) to Rashmi Saluja, chairperson Religare Enterprises. Earlier this month, IRDA had directed Care to cancel the stock options that it granted to Saluja also to take regulatory approval before fixing the remuneration of any director in future until further orders. Care, the main cash-generating subsidiary of Religare and second-largest standalone health insurer worth at least Rs 10,000 crores, had granted 22.7 million ESOPs to Saluja in December 2021. IRDA is of the view the CARE has breached several rules and responsibility for the same has to be fixed for which the board of CARE too is being investigated, sources said.
