Allegations against Buch: Sebi board lacks power to act, experts point out

The Securities and Exchange Board of India (Sebi) board meeting on Monday was expected to address allegations of disclosure lapses and conflicts of interest involving Chairperson Madhabi Puri Buch. However, two board members disclosed that the matter was not brought up, leaving some participants disappointed, especially in light of a slew of accusations from the country's main Opposition party, the Congress.

- SAMIE MODAK & KHUSHBOO TIWARI

Former Sebi officials and legal experts have pointed out that the board has limited scope to act on such issues.

“Chairpersons and whole-time members (WTMs) are appointed by the government. Only the government has the authority to take disciplinary action against them. Unlike a typical company board, Sebi's board cannot remove or penalise these officials. Even in cases of apparent conflict of interest, the board lacks the power to initiate formal proceedings,” a former Sebi chairperson explained.

Although conflicts of interest allegations were never part of the official board meeting agenda, there had been speculation that the issue might still be discussed. According to a Sebi rule, “any significant event since the previous meeting concerning the market can be taken note of by the board”.