SEBI chairperson Madhabi Puri Buch.
Credit: PTI Photo
New Delhi: Anti-corruption ombudsman Lokpal has said that a complaint by a Lok Sabha MP alleging impropriety and conflict of interest by capital markets regulator SEBI's chairperson, Madhabi Puri Buch "falls short" of persuading it to order any probe.
While deciding on two complaints filed by different individuals on the basis of a report by US-based "activist short-seller" Hindenburg Research, it asked the complainants to file affidavits mentioning details of the efforts made by them "to verify the authenticity and credibility of the claims in the recent report of Hindenburg Research published on 10.08.2024."
It also asked them to articulate the allegations against the "person concerned" which may constitute an "offence of corruption" within the ambit of the Prevention of Corruption Act, 1988, 'provision wise', as per the Lokpal's order dated September 20, which was put up in public domain "to obviate the possibility of speculation and misinformation including politicisation of the matter".
Hindenburg Research had in its report alleged that Buch and her husband had stakes in obscure offshore funds used in the alleged Adani money siphoning scandal.
The allegations were denied by the duo, who said the short-seller was attacking the capital markets regulator's credibility and attempting a character assassination. Adani Group had also termed Hindenburg Research's allegations as malicious and manipulation of select public information.
Hindenburg had said 18 months since its damning report on Adani, "SEBI has shown a surprising lack of interest in Adani's alleged undisclosed web of Mauritius and offshore shell entities." Obscure offshore Bermuda and Mauritius funds, allegedly controlled by Vinod Adani -- elder brother of the group's chairman Gautam Adani -- are alleged to have been used to round-trip funds and inflate stock price.
Dealing with the complaint "filed by a sitting Member of Parliament (Lok Sabha)", the Lokpal said "it falls short of persuading us to take a firm view that there exists a prima facie case as per Section 20 of the (Lokpal) Act of 2013 to proceed in the matter including to direct a preliminary inquiry or investigation, for the same reasons and logic spelt out (in the first complaint) hitherto."
In a post on X, Trinamool Congress MP Mahua Moitra had on September 13 said she had filed a complaint against SEBI chief with the Lokpal and said the anti-graft ombudsman should forward it to the Enforcement Directorate (ED) or the Central Bureau of Investigation (CBI) for preliminary probe followed by a "full FIR enquiry".
Without mentioning the name of the complainant, the Lokpal in its order said the communication filed in its office is dated September 11, 2024, whose entire copy "was contemporaneously placed in public domain (in media) despite the mandate of Rule 4 of the Lokpal (Complaint) Rules, 2020-guaranteeing protection of identity not only to the complainant but also to the public servant complained against till the conclusion of the inquiry or investigation."
It said the first complainant (name not mentioned in the Lokpal's order) drafted his complaint on July 13, 2024 (as is evident from the date noted at the end of the communication registered as the complaint), but may have improvised it on the basis of the recent report (published later) by Hindenburg Research dated August 30, 2024, which he downloaded from the internet on August 13.
"...and on the same day (August 13, 2024), forwarded his complaint online to the Lokpal on its official email. Be that as it may, the complainant claims to have come across the recent report of Hindenburg Research after its publication on August 10, 2024. From the chronology noted above, we have reason to believe that the complainant, without verifying the contents of the stated report and collating credible material, has rushed in his complaint on the same day online," the order said.
The Lokpal asked both the complainants to "articulate the allegations against concerned person which may constitute an 'offence of corruption' within the meaning of the Prevention of Corruption Act, 1988, 'provision wise'" in an affidavit.
It asked the complainants to file the affidavit explicating the foundational or jurisdictional facts on ten broad points.
The Lokpal sought details "regarding the efforts made by the respective complainant to verify the authenticity and credibility of the claims in the recent report of Hindenburg Research published on August 10, 2024".
"We make it clear that the observations made hitherto in the concerned complaint and/or in the totality, may not be construed as an expression of opinion by the Lokpal one way or the other.
"This direction is only a procedural order, issued for testing the question of tenability of the concerned complaint and to record a prima facie view as required under Section 20 of the Act of 2013, in the peculiar fact situation," reads the order issued by Lokpal chairperson Justice A M Khanwilkar and three other members -- Justices L Narayana Swamy, Ritu Raj Awasthi, and Sushil Chandra.
The Lokpal listed these cases on October 17, 2024 "for further consideration".