Lokpal clean chit to ex-SEBI chief
The anti-corruption ombudsman, in a 116-page order, said the complainants had failed to even frame specific and valid allegations under the Prevention of Corruption Act.
“As such, there is no foundation whatsoever for establishing even a prima facie case of corruption against Madhabi. This raises an important question of the real motivation behind filing such baseless complaints," read an excerpt from the order, accessed by The Tribune.
Notably, in January 2023, US short-seller Hindenburg published a report accusing the Adani Group of financial irregularities, leading to a significant drop in the company’s stock price. The group at the time had rubbished the claims and denied all accusations.
Eighteen months later, in 2024, the short-seller levelled allegations against then SEBI chairperson Madhabi and her husband, Dhaval Buch, of having a conflict of interest, claiming they held stakes in offshore entities linked to the alleged Adani money siphoning scandal.
Terming the charges baseless, Madhabi and Dhaval said the short-seller was attacking the credibility of the capital markets regulator.
The Lokpal, in its order, noted that one of the complainants even went public on social media regarding the filing of her complaint, which was a “clear and deliberate violation" of the confidentiality requirements under the Lokpal Act.
“It appears that the complaint was filed solely with the intention of generating media attention and not with the bona fide objective of pursuing legitimate grievance redressal," the order read, adding that the complainants approached the Lokpal with “unclean hands".
It further said in one of their most recent submissions, one complainant appeared to be attempting to gain access to confidential SEBI investigation records concerning the Adani matter despite the fact that the Supreme Court had already closed the matter.
The Lokpal said several allegations made by the complainants emerged as fabrications based on illegally obtained income tax returns (ITR) of Madhabi, her husband and Agora Advisory.
“The complainants used the ITR information, illegally accessed details of TDS on payments to RPS (Madhabi), to reverse engineer a false narrative. They cherry-picked publicly available data about the companies that had made any TDS deductions in the ITRs, including in matters of SEBI where Madhabi had no involvement whatsoever, and sought to fabricate a link between these companies and regulatory decisions, even where no such link existed," it said.
The order further asserted that routine SEBI decisions were recast as part of an alleged grand conspiracy involving not only Madhabi but also the entire SEBI Board, its whole-time members, the high-powered committee on settlements (chaired by a retired HC judge), the takeover panel (also chaired by a retired HC judge), and dozens of SEBI officers.
“To ask for a corruption probe into all these individuals based on speculative claims of ‘influence’, with not a shred of evidence of any wrongdoing, is plainly unjustified and solely politically motivated," the order read.
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