Govt invites applications for new SEBI chairperson; Congress targets ad

The Indian government has initiated the process to select a new chairperson for the Securities and Exchange Board of India (SEBI), with the tenure of the current chairperson, Madhabi Puri Buch, set to end on February 28. The Department of Economic Affairs, under the Union Ministry of Finance, issued a public advertisement inviting applications for the position. The new chairperson will be appointed for a maximum term of five years or until the individual reaches 65 years of age, whichever is earlier. The deadline for submitting applications is February 17.

Madhabi Puri Buch assumed office as SEBI chairperson in March 2022, succeeding Ajay Tyagi, who served from March 2017 to February 2022. Buch became the first woman to lead the market regulator. During her tenure, SEBI carried out significant regulatory work in overseeing market stability, investor protection, and enforcing regulations related to securities transactions. Buch’s leadership was marked by a focus on increasing transparency and market integrity, including initiatives aimed at improving corporate governance standards.

However, her tenure came under intense scrutiny after the US-based short-seller Hindenburg Research accused her and her husband, Dhaval Buch, of having stakes in offshore entities connected to the Adani Group. The allegations claimed that these entities were involved in financial arrangements linked to stock price manipulation and fraud. In response, Madhabi Puri Buch and Dhaval Buch denied the accusations, stating that the investments were made before she joined SEBI in 2017. They also asserted that all disclosure requirements had been fully complied with at the time of her appointment. SEBI initiated an inquiry into the allegations, but the controversy surrounding the issue continued to be a topic of debate.

Despite the allegations, the investigation into the Adani Group by SEBI remained ongoing. In 2023, SEBI issued notices to six Adani Group firms over alleged violations of stock market norms. Additionally, SEBI sent a "show cause" notice to Hindenburg Research over its role in allegedly violating rules related to short-selling based on non-public information. The Supreme Court of India, in January 2023, dismissed calls for a separate investigation, ruling that there was insufficient material evidence to suggest any glaring regulatory failure by SEBI. The court noted that media reports and third-party investigations could not serve as conclusive proof of any inadequacies in SEBI’s probe.

The position of SEBI chairperson comes with substantial responsibilities. The new chairperson will oversee SEBI's role as a market regulator, which includes enforcing securities laws, monitoring market conduct, and ensuring investor protection. The government’s advertisement stipulates that candidates must possess over 25 years of professional experience in fields such as law, finance, economics, or accountancy, and demonstrate the capacity to deal with complex issues related to securities markets. Candidates must also uphold the highest standards of integrity and should not have any financial interests that could conflict with their role as the head of SEBI.

The appointed SEBI chairperson will receive a salary of ₹5,62,500 per month, which is equivalent to that of a secretary to the government of India. The role does not include provisions for housing or transportation. The government will select the new chairperson based on recommendations from the Financial Sector Regulatory Appointments Search Committee (FSRASC), which is headed by the Cabinet Secretary. The committee can also recommend additional candidates who may not have applied, based on merit.