Sebi to form committee to review conflict of interest provisions for members

The Securities and Exchange Board of India (Sebi) has announced plans to establish a committee to review the provisions related to the disclosure of conflicts of interest by its members. This decision comes months after the regulator’s former chairman was accused of withholding investigations into the Adani group due to potential conflicts of interest.
In its first meeting under new chairman Tuhin Kanta Pandey on Monday, Sebi decided to form a high-level committee that will conduct a detailed review of conflict-of-interest regulations. These provisions pertain to the property, investments, and liabilities of Sebi board members and officials.
Pandey stated that the committee will comprise eminent individuals with expertise in constitutional, statutory, or regulatory bodies, as well as those from the public sector, private sector, and academia. The names of the committee members will be announced shortly, news agency PTI reported.
The move follows accusations against Pandey’s predecessor, Madhabi Puri Buch, who served as the Sebi chair until February. Hindenburg Research had accused Buch and her husband of holding undisclosed holdings in entities based in Bermuda and Mauritius, which allegedly had connections with the Adani Group. These accusations raised questions about whether Sebi had been slow to investigate fraud allegations against the powerful conglomerate. Both Buch and the Adani Group denied the allegations, with Buch and her husband strongly rejecting the claims.
Pandey, who has reintroduced press conferences to communicate Sebi’s decisions, highlighted that the last major revision of disclosure norms for Sebi members occurred in 2008. He emphasized the need for an updated review to build trust in the institution.
“The objective of this high-level committee is to review and make recommendations for enhancing the existing framework to manage conflicts of interest, disclosures, and related matters, ensuring transparency, accountability, and ethical conduct by Sebi members and officials,” Pandey explained.
Pandey also pointed out that the committee would operate independently of Sebi, with the regulator providing secretarial support. The committee’s formation is expected to take place soon after the members give their consent. The panel is expected to submit its recommendations within three months, and these will be presented to Sebi’s board for consideration.
Regarding conflicts of interest, Pandey highlighted the importance of building trust and operating transparently. He explained that while Sebi already has accountability measures in place, the review would focus on refining the specifics and clarifying expectations regarding disclosures.
On the timing of the committee’s formation, Pandey responded, “Why not now?” He emphasized that the review should not be seen as an admission of shortcomings in Sebi’s past actions but rather as an ongoing effort to strengthen the institution’s integrity.
The committee will also explore ways for Sebi officials to recuse themselves from situations involving conflicts of interest. Sebi, as the market regulator, is held to high standards of accountability, and this review aims to ensure its operations maintain integrity and transparency.
Earlier, in response to Hindenburg’s allegations of corporate fraud involving the Adani Group, the Supreme Court had dismissed requests for a court-monitored investigation, directing Sebi to conclude its probes. Despite the ongoing investigations, Sebi has not yet made public the findings related to the Adani Group.