3 most striking orders issued by new SEBI chief Madhabi Buch

Madhabi Puri Buch, who on February 28 was appointed the chairperson of the Securities and Exchange Board of India, is known to be big on using data and tech for enhancing regulatory tech capabilities.

The first woman to head the market regulator, Buch was a whole-time director of SEBI’s board until October 2021, a position she held for almost four years.

A former banker and veteran of India’s capital market, Buch’s expertise lay in empowering companies through data. She was recently appointed by the regulator to head the newly-formed committee on enhancing SEBI’s tech capabilities.

Her appointment comes at a time when the regulator’s handling of corporate misgovernance at the National Stock Exchange is under scrutiny. Finance Minister Nirmala Sitharaman recently said the government was examining if SEBI took adequate action on the NSE issue.

Buch, the former chief executive officer of ICICI Securities, was in the thick of things at SEBI, coming down hard on insider trading and other violations. Here are some of the orders passed by her in high-profile cases: 

Zee Entertainment insider trading

In August 2021, Buch indicted 15 entities, including individuals, for insider trading in shares of Zee Entertainment Enterprises. 

The order found suspicious trading activity by SEBI in the shares of the media conglomerate around the announcement of the company’s first-quarter earnings for 2019-20.

The case was an example of SEBI’s growing prowess in identifying unfair trades in the marketplace through its surveillance system.

Also read: 'Proud moment for us women': Congratulatory messages pour in for new SEBI chief Madhabi Puri Buch

Deep Industries and social media links

In May 2021, Puri’s order in the case of Deep Industries Limited kicked off a storm because of the unconventional method used by the market regulator to arrive at a connection between two parties to prove that they had shared unpublished price-sensitive information (UPSI).

Puri’s order said the regulator had examined social media profiles of the accused entities and found that they were ‘Friends’ on the platform and had ‘liked’ each other’s posts. “…an insider can be by way of their association in any capacity or it can be by way of frequent communication with its officers, which can also be in their social capacity as evident in this case by frequent interactions, including on social media,” Buch said.

The order saw a market backlash, with some saying the measures used to draw a connection between the two sides and to conclude sharing of UPSI were arbitrary.

Also read: Who is Madhabi Puri Buch, the first-ever woman to head SEBI?

Sahara Group crackdown

In a 2018 order, Buch came down hard on the Sahara Group after finding that a group company raised Rs 14,000 crore in violation of SEBI rules through optionally fully convertible debentures.

While Sahara Group firm argued that it returned the money, Buch said that the company failed to furnish proof of repayment. Her order added to the Subrata Roy-owned group’s troubles, as a previous SEBI order had asked it to repay Rs 24,000 crore to investors.