In the landscape of Indian regulatory bodies, the SEBI stands firmly as a giant eagle eye tasked with the responsibility of protecting a myriad of investors, regulating an Indian economy where companies work on trillion-dollar market capitalisations, and ensuring that India’s financial markets remain vibrant, transparent and trustworthy.

When Madhabi Puri Buch ascended to its chairpersonship in March 2022, breaking the glass ceiling as the first woman to hold this prestigious position, financial newspapers heralded it as a watershed moment. Here was a former private banker from ICICI, with stints at global consulting firms, bringing her market expertise to guide India’s paramount market regulator. The narrative was perfect until the third year of the decade arrived.

As the doubtful dust still waves on Buch’s controversial tenure, the markets are left contemplating a troubling question: was SEBI’s regulatory chair itself in need of regulation? This question goes beyond academic posturing; it goes to the very heart of investor faith in India, a country where retail participation in equity markets has grown exponentially. When SEBI speaks, the markets listen. But when SEBI stumbles, the markets tremble. And those shaky waves include allegations of conflicts of interest, selective regulatory actions, and troubling connections that have cast long shadows over the institution’s credibility.

The recent Bombay High Court stand involving Buch exemplifies the regulatory morass that has become increasingly characteristic of her tenure. On March 1st, 2025, just a day after Madhabi Puri Buch’s tenure as SEBI chief ended, a special PMLA Court directed the filing of an FIR against Buch and 5 others over alleged regulatory violations related to Cal Refineries. The complainant, Sapan Shrivastava, claimed substantial losses from investments, alleging violations meriting probes under provisions of cheating, forgery, and criminal conspiracy. Although the High Court subsequently stayed this order, Justice Shivkumar G Dige observed that the Special Judge had acted “mechanically without going into the details.” This episode added to the increasing controversies of Mrs. Buch’s term.

1. Solicitor General Tushar Mehta, representing the SEBI officials, characterised the complaint as “vexatious,” pointing out that the IPO in question dated back to 1994, predating the appointments of those named in the complaint to either SEBI or the BSE.
2. Senior advocate Amit Desai, appearing for two BSE officials, went further, arguing that the complainant had made “scandalous statements which have serious ramifications for the economy.”
3. Meanwhile, senior advocate Sudeep Pasbola, representing Buch, asserted that action couldn’t have been taken based on “vague allegations.”

The legal machinery worked swiftly to protect the regulator’s top fellas, as it always do (recall the Pune Porsche case and YSRCP MP’s Daughter BMW Car case), perhaps too swiftly for comfort, given the gravity of the allegations and the public interest in transparent market regulation.

Why do we say that SEBI needs a rehaul?

Although Buch and others were not present at SEBI during the case of Cals Refineries’ alleged manipulation, the allegations raise troubling questions revolving around the regulator’s previous effectiveness and the consistency of its regulation.
The Cals Refineries controversy, however, draws comparison to the elephant in the room – the allegations about the Adani Group following the explosive Hindenburg Research report.

When these allegations surfaced, casting a spotlight on SEBI and its chairperson, Buch and her husband Dhaval issued a formal clarification that bizarrely began by flaunting their educational credentials – Mrs Buch, an IIM Ahmedabad alumnus, her husband as an IIT Delhi graduate. This strange defence strategy has everyone wondering: were they claiming that their highest academic qualifications protected them from ever having done anything wrong?

In a country where people often place academic qualifications high on the list as symbols of good character, this strategy emerged to have been designed to appeal to a special Indian regard for high-profile degrees.

This episode reflects a bigger trend in contemporary India, where events are carefully constructed and put on platforms like WhatsApp, with different realities arising that cater to the powerful. From glorious claims about economic performance manufactured at the highest political levels to more fine narratives marketed by subordinates, an ecosystem of managed information is designed to shape public perception. While this observation doesn’t pass judgment on Buch specifically, it highlights a troubling belief among India’s elite that public opinion can be managed through carefully curated presentations rather than substantive accountability.

The Adani-SEBI entanglement presents a case study of what may be called “technical compliance” v/s actual integrity.

Even if one accepts Buch’s defence at face value, it primarily revolves around how procedural requirements were done and appropriate boxes ticked rather than addressing the substantive concerns about conflicts of interest. This recalls the case of Chanda Kochhar, Buch’s former colleague at ICICI Bank, who was initially given a clean chit based on reported compliance before being dismissed when Justice B.N. Srikrishna’s probe uncovered deeper improprieties at what was then India’s largest private sector bank.

Without a similar thorough inquiry in Buch’s case, critical questions remain unanswered:

1. Why did SEBI aggressively promote Real Estate Investment Trusts (REITs)?
2. How did Blackstone – the employer of Buch’s husband – benefit from these regulatory decisions?
3. Why did SEBI appear reluctant to probe the Adani group comprehensively?

There is a larger issue of whether it is smart to make housing markets financial tools, like REITs, and what this does to ordinary citizens’ ability to buy homes. While the government may believe Buch’s retirement would quell these controversies, they must be subjected to more vigorous tests if faith in regulations is to be restored.

Yet another defence sometimes mounted on behalf of people like Buch is their category as HNIs. The argument runs that folks with too big salaries, Employee Stock Ownership Plans, and performance bonuses would of course have enormous wealth, which would be seen by their holdings, investments, and lifestyle preferences. While such a view does have some point, it underestimates how power and relationships open up new possibilities that thrive in atmospheres of intentional blindness. Further, a democratic country needs to probe what particular set of qualifications or regulatory experience these backgrounds confer upon key governance positions.

This is a concern that must be weighed against a troubling trend in contemporary India: the increasing tendency to outsource regulatory authority to the super-rich and well-connected, which creates a controlling club of sorts where power begets power. This is the emergence of a plutocracy masquerading as a meritocracy, where self-appointed “star performers” invent their own metrics of success and achievement.

The actual contribution and value added by these people are worthy of being scrutinised separately and not automatic acceptance. The best criticism of Buch’s tenure also reveals a tough reality: there is no SEBI chairman today in India who can actually defy mighty players like the Adani Group without incurring massive political costs. This political issue reflects a larger collapse of institutions in a variety of categories.

In Buch’s case, however, charges involve not only compromising on political pressure but being part of the game itself. That is not a sign of professionalism but does bring into question blurring lines between the regulator and the regulated – particularly for people who have the correct connections. The critical question emerges: Who makes these appointments, and how do they strengthen rather than undermine institutional integrity?

Returning to Cal Refineries, the company at the centre of this controversy has a shady past. Over the years, it has been caught in extensive stock manipulations and a global depository receipts scam. Its links to Ketan Parekh, the notorious architect of the 2000-2001 securities scam who received a 14-year SEBI ban. In January 2025, SEBI discovered that Parekh had covertly orchestrated a ₹65 crore front-running operation.

Whether Mrs Buch and others were not present at the time of the fraudulent activities doesn’t deny the fact that there were fraudulent activities. The stay on interim order may or may not be needed, but the call of defence saying that the accused are innocent and do not have any connection with the case may not be in the right direction.

Doesn’t this scene sound familiar from a movie named ‘mamla legal hai’? In one of the episodes, the bail is granted because the FIR was lodged under the wrong section. Let me tell you the context. There was a crime, but the bail was granted because the section under which the arrest was made was wrong! Similar is this case.

Though if we take the defence of the Ex Sebi chief and others that they were not in THE position when the Cals Refineries manipulation occurred, that doesn’t mean there was not any stock manipulation. A rational person will ask to file an FIR against the concerned people but hail the Indian Judiciary; rather than focusing on crime, they are just giving interim stay orders to safeguard the accused.

Suppose one argues what is wrong in safeguarding those who have no connection with the concerned case; let me remind you- there was no connection of Madhabi Puri Buch’s alleged connection with Adani after Hindenburg’s first report. However, only after one year did we come to know that the Buchs had alleged connections with Vinod Adani’s firm, the brother of Gautam Adani. So a person under scanner once will always be under lenses. We can’t ignore the fact that Mrs Buch and her close connections (like Chanda Kochar from ICICI) always walked under shady routes, and everyone knows the circle defines the person!

The conclusion is fair: no SEBI chair can talk, let alone act, against a power centre like Adani in today’s India. That is the political bind of the day, and its cost is the degradation of institutions across the board. However, in this case, the chair was also accused of playing the game. Instead of high grades for professionalism, this seeks high marks for connections and cover-ups. For a chosen few, the gap between regulator and regulated is gone.

Talking about whether the SEBi head can be corrupted or not, recall the case of another Ex SEBI chief, Shri M. Damodaran, who has faced Rs 206-cr claim following breach-of-contract lawsuit between two healthcare cos. That again gives us the signal to believe that even The SEBI Is Not Corruption Free In World’s Most Corrupt Country.

The question that pops up is simple: Who really makes these appointments, and how do they strengthen the institution? The RTI for Ex-SEBI chairperson Mrs Madhabi Puri Buch’s appointment gave no significant answers. On what basis or qualifications does she have that makes her competent enough to run a securities market? Or should we consume that she was planted by A’s of the country so that she could work in favor of them.

This is not an allegation. Similar things have been noticed in the past also. Recall the 2016 affair when TRAI and its chairperson RS Sharma was criticised for relaxing rules that gave a competitive edge to Ambani’s JIO. Not only the criticism of the decision was by big old telecom operators like Bharti Airtel, Vodafone and Idea, the then RS Sharma’s predecessor Rahul Khullar had been sharply critical of the move, calling it a “poor decision” that gave an edge to billionaire Mukesh Ambani’s Reliance Jio. Though these are all allegations, but allegations always stem there when there is something Fishy!

There is no denial that Mrs Buch has taken some worthy calls, like pulling the rope to control the untamed SME IPO market, or banning the people who misuse the proceeds of IPO like Varanium Clouds, or advising the novices to refrain from insider trading, but few goods cannot cover the wrong deeds, if any. So anyone who has been involved in something shady, should undergo investigations, and hence repercussions!

In matters of regulatory watch, few good actions cannot compensate for fundamental failures of governance and transparency. When the guardians of the market themselves come under suspicion, the entire building of market confidence trembles like cards!

Also, international cases offer valuable lessons that India can learn. The 2008 global financial crisis revealed how regulatory collapse, where regulators became too close to the firms they supervised, was one of the reasons that contributed to systemic failures. 

The tensions found in these scandals have far-reaching implications beyond specific cases. When SEBI employees organised protests against toxic work culture at SEBI, they uncovered fault lines within the apex institution itself. Those fault lines, combined with external credibility challenges, have created a perfect storm threatening SEBI’s effectiveness. Rebuilding will require time, transparency, and a genuine commitment to institutional integrity.

The best means of institutional redemption would be to go through a judicial probe into the actions and judgments that involved Mrs Buch’s tenure. This would show commitment to what SEBI itself had described as a “robust regulatory framework that not only runs with best global practices but also ensures protection of investors”. If the public do not get this assurance, and doubts remain, then this may undermine investor confidence at times when India desires to welcome foreign capital and become a safe investment destination.

The story of Mrs Madhabi Puri Buch at market regulator ultimately involves individual failings, pointing to systemic weaknesses in how regulatory appointments are made and oversight is maintained. In the chess game of power and influence that characterises contemporary Indian governance, the pawns are invariably ordinary investors whose interests should be paramount but are frequently sacrificed for political and personal advantage. The regulatory chair at SEBI indeed needs firm repair – not merely through personnel changes but through structural reforms that insulate it from both political pressure and conflicts of interest.

As India aspires to become a global financial powerhouse, the quality and integrity of its market regulation will increasingly determine its success. International investors scrutinise regulatory frameworks as closely as they analyse balance sheets, and domestic retail investors – whose participation has surged in recent years – depend on fair and transparent markets for their financial security. The shaking chair at SEBI’s helm must be stabilised not just for market pundits but for the financial wellbeing of millions of Indians who have entrusted their savings to the markets SEBI oversees.

In the final analysis, the controversies surrounding Buch’s tenure serve as a cautionary tale about the consequences of regulatory capture and conflicts of interest. They remind us that breaking glass ceilings, while symbolically important, means little if institutional integrity is compromised in the process. India’s financial markets deserve better – they deserve regulators whose commitment to fairness and transparency is beyond question, whose independence is structurally protected, and whose actions consistently prioritise investor protection over personal or political considerations. Until such governance is assured, India’s capital markets will continue to operate under a cloud of uncertainty, with investors left wondering whether the referee may have a stake in the game they’re supposedly officiating.