Madhabi Puri Buch Case: Lokpal Tears Into Complainants And Reminds Of Its Action-Taking Powers

Anti-corruption watchdog, Lokpal, while dismissing all allegations levelled against Madhabi Puri Buch, former Chairperson of SEBI, rebuked complainants for coming to the authority with 'unclean hands'.

The complaints had been filed by Supreme Court advocate Prashant Bhushan, Trinamool Congress leader Mahua Moitra, and former IPS officer Amitabh Thakur. In its 116-page order, the Lokpal made it clear the complaints were based on “unverified and flimsy or fragile allegations.”

The Lokpal, in its order dismissing complaints against former SEBI chief Madhabi Puri Buch, strongly criticised the complainants for their intent to “sensationalise” and “politicise” the matter.

The order stated that such conduct trivialised the process before the Lokpal and amounted to “vexatious proceedings,” potentially punishable under Section 46 of the Lokpal and Lokayuktas Act, 2013.

Section 46 provides for the prosecution of individuals who file false or frivolous complaints, with penalties including imprisonment of up to one year and a fine of up to one lakh rupees.

The anti-corruption body gave a clean chit to Buch from various accusations including having investments linked to the Adani Group, quid pro quo disguised as consultancy fees and rental income, undue gains from ICICI Bank ESOPs, and a pretence of recusal from certain cases.

But what stands out in the detailed order is that the case against her was noted to be based on "assumptions and presumptions".

There were three complaints filed against Buch before the Lokpal last year, but the order noted that no case could be made out against her due to lack of specific allegations and failure to justify a case under the Prevention of Corruption Act. The authority went on to observe that prima facie, no case is made out against Buch.

Additionally, the order highlighted that one complainant employed unlawful means to obtain some personal documents of Buch and her husband to solidify allegations against her. These documents included her income tax returns along with those of her husband’s and her firm called Agora Advisory. These documents were further circulated and discussed in the media through press conferences.

Another complainant attempted to gain access to confidential SEBI records as well.

The Lokpal also expressed concern over the one complainant’s decision to publicise the filing of the complaint on social media. This act, the order noted, was in clear breach of the confidentiality requirements enshrined in the Lokpal Act. The order states that this behaviour showed that the complaints were filed not with a bona fide intention of seeking justice, but rather to generate publicity.

It was noted that when the media campaign fizzled out due to a lack of interest, the complainants turned to the Lokpal in what appeared to be an attempt to 'keep the issue alive'.

The authority noted that two out of the five sets of allegations brought against Buch are beyond the statutory period of limitation, that is, beyond the permissible time frame and hence no inquiry could be conducted on those.

Regarding the allegations of ESOPs by ICICI, which the complainants claimed was a quid pro quo for regulatory decisions by SEBI, the order noted that these stock options were granted before 2011—before Buch even became a public servant.

The subsequent vesting or sale of shares was in line with the standard ESOP scheme for former employees and has no bearing on the limitation period. Therefore, this complaint too falls outside the permissible time frame, the Lokpal observed.

The allegation that Blackstone’s REIT registration was linked to Madhabi Puri Buch’s spouse’s advisory engagement with the firm is unsupported, the Lokpal found. No evidence has been provided to show that Blackstone was ineligible for registration or that Buch played any role in the process.

Again, her detailed response and supporting documents conclusively rebut the claim. There is no prima facie case of undue advantage, Lokpal noted.

In the case of ICICI Bank, the complainant’s original claim that Madhabi Puri Buch received “salary for favors” has been debunked—what was claimed as salary was the perquisite value of ESOPs granted during her career at the bank, and no payment was made to her by ICICI post-employment, the order noted.

Another allegation that was levelled against Buch was getting consideration from Wockhardt Ltd. in furtherance of its settlement application. However, the anti corruption body noted that the claim regarding rent received for a flat in Mumbai from a Wockhardt associate is equally baseless.

The order further noted that the complainant failed to show that the rent was above market rates or that the SEBI settlement order deviated from regulatory norms.

Additionally, the order debunked allegations of Buch's excess influence on the market regulator, SEBI. It was observed that the complainant’s broader theory implies a sweeping conspiracy, suggesting that SEBI’s full institutional machinery, including its officers, WTMs, and respected external committees, were influenced to act unlawfully at the behest of one individual.

The allegations against Madhabi Puri Buch do not withstand even preliminary scrutiny, the Lokpal noted.