Lokpal dismisses MP’s complaint against SEBI chief: Rediff Moneynews

New Delhi, Sep 22 (PTI) – Anti-corruption Ombudsman Lokpal has said that a complaint filed by a Lok Sabha MP alleging irregularities and conflict of interest by capital markets regulator SEBI Chairman Madhabi Puri Buch is “not enough” to prompt the agency to launch an inquiry.

In deciding two complaints filed by different individuals based on a report by US-based “activist short seller” Hindenburg Research, it asked the complainants to file affidavits setting out details of their efforts to “verify the authenticity and credibility of the allegations made in Hindenburg Research’s latest report dated 10.08.2024”.

They were also asked to frame the allegations against the “person concerned” which could constitute an “offence of corruption” under the Prevention of Corruption Act, 1988, according to the Lokpal’s September 20 order, which was made public “to prevent the possibility of speculation and misinformation, including politicisation of the matter”.

Hindenburg Research had claimed in its report that Buch and her husband owned shares in obscure offshore funds that played a role in the alleged Adani embezzlement scandal.

The two denied the allegations. They said the short seller was attacking the credibility of the capital market regulator and was attempting to commit character assassination. The Adani Group had also described the allegations by Hindenburg Research as malicious and a manipulation of selected public information.

Eighteen months after the damning report on Adani, Hindenburg said: “SEBI has shown a surprising disinterest in Adani’s alleged undisclosed network of shell companies in Mauritius and abroad.”

Unknown offshore funds in Bermuda and Mauritius, allegedly controlled by Vinod Adani, the older brother of company chairman Gautam Adani, are said to have been used to transfer money and increase the share price.

Referring to the complaint, which was “filed by a sitting Member of Parliament (Lok Sabha),” the Lokpal said, “It is not sufficient to convince us that there is a prima facie case under Section 20 of the (Lokpal) Act, 2013 to proceed further in the matter, including ordering a preliminary inquiry or enquiry, for the same reasons and with the same logic as have been set out so far (in the first complaint).”

In a post on X, Trinamool Congress MP Mahua Moitra had on September 13 said she had filed a complaint with the Lokpal against the SEBI chief and said the Anti-Corruption Ombudsman should forward it to the Enforcement Directorate (ED) or the Central Bureau of Investigation (CBI) for preliminary investigation, followed by a “full FIR investigation”.

Without mentioning the name of the complainant, the Lokpal in his order said that the notice filed with his office was dated September 11, 2024 and that the entire copy “was simultaneously made publicly available (in the media) despite the mandate of Rule 4 of the Lokpal (Grievance) Rules, 2020, which guarantees protection of identity not only to the complainant but also to the officer against whom the complaint is made, till the completion of the inquiry or investigation.”

It states that the first complainant (name not mentioned in the Lokpal order) had written his complaint on July 13, 2024 (as evident from the date at the end of the notice registered as complaint) but may have improvised it on the basis of the latest (later published) report of Hindenburg Research dated August 30, 2024, which he had downloaded from the internet on August 13.

“…and forwarded his complaint online to the official email address of the Lokpal on the same day (13 August 2024). Be that as it may, the complainant claims to have come across the recent report of Hindenburg Research after its publication on 10 August 2024. From the chronology given above, we have reason to believe that the complainant, without verifying the contents of the said report and collating credible material, has submitted his complaint online on the same day,” the order said.

The Lokpal asked both the plaintiffs to file an affidavit “declaring the allegations against the person concerned which could ‘properly’ constitute an offence of corruption under the Prevention of Corruption Act, 1988”.

The plaintiffs were asked to file an affidavit setting out the basic or legal facts on ten general points.

The Lokpal demanded details “of the efforts made by the respective complainant to verify the authenticity and credibility of the allegations made in the latest report of Hindenburg Research dated August 10, 2024”.

“We make it clear that the observations made so far in the complaint in question and/or in its entirety cannot be construed as an expression of opinion of the Lokpal in one direction or the other.

“This direction is only a procedural direction issued to examine the question of merit in the complaint in question and to take a prima facie assessment under Section 20 of the Act, 2013 in the particular facts of the case,” said the order by Lokpal Chairman Justice AM Khanwilkar and three other members – Justices L Narayana Swamy, Ritu Raj Awasthi and Sushil Chandra.

The Lokpal listed these cases “for further consideration” on October 17, 2024.