The head of India's markets regulator, Madhabi Puri Buch, continued to earn revenue from a consultancy firm during her seven-year tenure, potentially breaching rules for regulatory officials, according to public documents reviewed by Reuters.

Hindenburg Research has alleged a conflict of interest in Buch's investigations surrounding the Adani Group due to her previous investments. The allegations against the Gautam Adani-led conglomerate, made in January last year, triggered a big drop in the share prices of the flagship Adani Enterprises and other group firms which later recovered, prompting an ongoing investigation by the Securities and Exchange Board of India (SEBI).

Buch, in a statement on Aug. 11, denied allegations of a conflict of interest and termed them as an attempt at "character assassination".

Separately, the U.S. shortseller, in its latest report, highlighted two consultancy firms operated by Buch and her husband - Singapore-based Agora Partners and India-based Agora Advisory.

Buch joined SEBI in 2017 and was appointed to the top position in March 2022. In those seven years, Agora Advisory Pvt Ltd in which Buch has 99% shareholding, earned a revenue of 37.1 million rupees ($442,025), according to public documents from the Registrar of Companies, analysed by Reuters.

Buch's holdings potentially violate a 2008 SEBI policy that prohibits officials from holding an office of profit, receiving salary or professional fees from other professional activities.

Buch in her statement said the consultancy firms had been disclosed to SEBI and that her husband used these firms for his consulting business after retiring from Unilever in 2019.

Buch and the SEBI spokesperson did not immediately respond to emails seeking comment.

Hindenburg, citing Singapore company records, stated that Buch transferred all her shares in Agora Partners to her husband in March 2022. However, according to company records for the financial year ending March 2024, Buch still holds shares in the Indian consulting firm.

The documents, reviewed by Reuters, do not detail the business undertaken by the consultancy nor is there any available information to suggest these revenues had any link to the Adani Group.

Subhash Chandra Garg, a former top bureaucrat in the Indian government and a SEBI board member during Buch's tenure, described her equity in the firm and its continued business operations as a "very serious" breach of conduct.

‘No justification to continue business’

"There was no justification for her to continue to own the firm after she joined the board. She could not have been allowed even after making disclosures," Garg said.

"This makes her position completely untenable at the regulator."

Buch has not clarified whether she was granted a waiver to retain her shareholding in the Indian consulting firm. A specific query to her on this was also not answered.

Hindenburg's allegations have led to calls for Buch's resignation, including from opposition leaders. A spokesperson for the ruling Bharatiya Janata Party (BJP) called it a baseless attack.

According to Garg and a SEBI board member, no disclosures were made by her or any other officials to the board regarding their business interests.

"There was a requirement to make annual disclosures, but board members' disclosures were not placed in front of the board for information or scrutiny," the board member said, who declined to be identified as information on disclosures to the board is not public.

"To be sure, no members' disclosures were discussed. If the disclosures were made only in front of Ajay Tyagi, the then chairperson, I am not privy to that," Garg said.

Messages and calls to Tyagi about whether disclosures were made to him were not answered.

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