Finance Ministry Likely to Submit SEBI’s Financial Records as Parliament’s Accounts Committee is Set to Inspect Regulators

The Union finance ministry is likely to submit the financial records of the Securities and Exchange Board of India (Sebi) to Parliament’s Public Accounts Committee (PAC) on September 27. The documents will include Sebi’s receipts and payments for the financial years 2022-2023 and 2023-2024, the Comptroller and Auditor General’s (CAG) audit report and the regulator’s internal audit committee observations, according to Moneycontrol. 

Additionally, the PAC will hold a performance review of other regulatory bodies, including the telecom regulatory authority of India (TRAI). The 22-member panel, in its first meeting on August 29, picked five subjects for suo motu investigations, including “performance review of regulatory bodies established by the Act of Parliament” and “levy and regulation of fees, tariffs, user charges, etc. on public infrastructure and other public utilities”. 

The PAC, tasked with auditing the central government’s income and expenditure, had earlier requested the finance ministry to submit the regulator’s financial records. The 22-member committee will be chaired by Congress leader KC Venugopal and consists of 12 members from both the BJP-led NDA and eight MPs from the opposition INDIA bloc. 

Moreover, this will be the first time that PAC has called for SEBI’s performance review following the accusations against its chief by the American short-seller Hindenburg Research and its employees. 

“The PAC has never called Sebi earlier. It has asked for the data and the last date is September 27, by which the finance ministry has to submit the information to the parliament secretariat,” Moneycontrol reported, citing a government official. After the committee completes the review of records, it is likely to summon Sebi chairperson Madhabi Puri Buch, the official said. 

 Why are all eyes on Sebi chief? 

The move to review Sebi’s financial records came after Hindenburg, in its recent report, alleged Sebi chief and her husband Dhaval Buch’s involvement in Adani Group’s offshore funds scandal. 

“...the current Sebi chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani,” said the Hindenburg report on August 10. 

Just weeks after the controversy around Hindenburg was slowing down, Sebi chief’s name surfaced in another contention between her and the regulator’s employees. The employee, in a letter addressed to the finance ministry, complained about the leadership and HR practices that encouraged a ‘toxic work culture’ in the organisation under Buch’s leadership. 

Following these allegations, the opposition leaders raised concerns over the integrity of Sebi and consequently asked for Madhabi Puri Buch’s resignation. 

“Honest investors across the country have pressing questions for the government. Why hasn’t Sebi chairperson Madhabi Puri Buch resigned yet? If investors lose their hard-earned money, who will be held accountable—PM Modi, the Sebi chairperson, or Gautam Adani?,” said Rahul Gandhi.