Unveiling the Three-Year Tenure of Madhabi Puri Buch: A Miss Here, A Hit There
The Dissecting of Madhabi Puri Buch’s Three-Year Tenure: A Report Card
Madhabi Puri Buch, the tenth chairperson of the Securities and Exchange Board of India (Sebi), is all set to bid adieu to her three-year tenure on Friday. As she leaves behind a mixed legacy, reviewing her stint becomes imperative to understand the highs, lows, and controversies that marked her tenure. In this article, we will critically evaluate the hits, misses, and controversies that defined Madhabi Puri Buch’s era at the helm of the Indian capital market’s regulatory body.
HITS: A Glance at the Positives
One of the most significant achievements of Buch’s tenure was the introduction of curbs on derivatives trading, which led to a significant decline in F&O volumes. This move was necessitated by Sebi’s studies, which highlighted the loss of around ₹60,000 crore by households in derivatives trading every year. Under her leadership, Sebi also implemented a clean-up of brokers, ensuring that their access to client funds and securities was limited.
Additionally, Buch pioneered the launch of a new type of mutual fund product that allowed investors to participate in sophisticated investment strategies, as well as the approval of small and medium real estate investment trusts.
MISSES: A Look at the Not-So-Successful Initiatives
Despite her efforts to make equity investing safer, Buch faced resistance from the mutual fund industry, which opposed her proposal to cut total expense ratios, the fee asset managers charge unitholders. The proposal was put on hold, and a consultation paper was yet to be released.
Some of the business owners also felt that Buch’s tenure was marked by over-regulation, with the implementation of too many changes, which increased compliance burdens.
CONTROVERSIES: The Pardon Method
During her tenure, Buch faced several controversies, including allegations of fostering a ‘toxic work culture’ at Sebi, which led to employee protests. There were also claims of conflicts of interest, as well as allegations from a US-based research firm, Hindenburg, which leveled serious allegations against Buch and her husband.
The Congress party raised concerns about Buch trading in listed securities, disposing of ICICI Bank employee stock options during her Sebi tenure, and generating income through her consultancy firm, which potentially violated the regulator’s conflict of interest policy.
CASES TO REMEMBER: A Trilogy of Significant Cases
- Adani Group Case (2023): Sebi investigated the Adani Group over allegations of violating minimum public shareholding norms, failure to disclose related party transactions, and manipulating stock prices.
- Zee Entertainment Enterprises Case (2023): Sebi prohibited Zee Entertainment Enterprises founder Subhash Chandra and his son and company CEO, Punit Goenka, from holding directorships in Zee and its related companies in an alleged fund diversion case. The Securities Appellate Tribunal (SAT) later overturned the order against Goenka.
- Reliance Home Finance Case (2024): Sebi barred industrialist Anil Ambani and 24 other entities from the securities market for five years for their alleged involvement in unlawful activities leading to misappropriation of Reliance Home Finance funds. SAT later put a conditional stay on the order.
As Madhabi Puri Buch departs from Sebi, her legacy remains a mixed bag. While some initiatives were successful, others faced opposition from various stakeholders. The controversy surrounding her tenure will undoubtedly define her time at the regulators’ helm. Will her successor be able to build upon the hits or steer clear of the misses? Only time will tell.
Conclusion
In this article, we have dissected Madhabi Puri Buch’s three-year tenure at Sebi, examining the hits, misses, and controversies that marked her stint. While Buch made significant strides in curbing derivatives trading and promoting the use of technology, her tenure was also marked by controversies surrounding conflicts of interest, over-regulation, and employee protests. As Buch steps down, the onus is on her successor to build upon the positives and address the negatives. Only time will tell if they will be able to leave a lasting legacy.
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