“Baseless, misleading”: Wockhardt refutes allegations of rent payment by Carol Info to SEBI chief Madhabi Buch

Wockhardt on Saturday, September 7, refuted all allegations levelled by Congress that it made rental payments to Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch through its affiliate Carol Info Service. The company also denied any connection with the orders passed by the capital market regulator in connection to its affiliate company.

‘’It has come to our attention that there are certain allegations pertaining to payment of rent by Carol Info Services Limited and its connection with certain orders passed by SEBI in relation to the company. 

Also Read: Congress accuses SEBI chief Madhabi Buch of corruption for gaining rent income from Wockhardt firm: Here’s what we know

In this regard, we categorically deny these allegations and state that these allegations are completely baseless and misleading. The company has acted and continues to act in compliance with all applicable laws,'' said Wockhardt in a regulatory filing to the stock exchanges.

The statement comes after opposition Congress levelled fresh allegations of corruption and conflict of interest against the SEBI chairperson, saying Buch received rental income from a firm linked to Wockhardt when the market watchdog had placed the pharma company under probe for insider trading.
 

Congress' fresh salvo against SEBI's Madhabhi Puri Buch

On Friday, Congress' media and publicity department head Pawan Khera said that between 2018 and 2024, Buch -- as a whole-time member and later chairperson of capital market regulator SEBI-- had been receiving rental income amounting to ₹2.16 crore from "Carol Info Services Limited", a company affiliated to Wockhardt Limited.

Khera asserted that this was an outright case of corruption that invoked conflict of interest, violating sections 4, 7 and 8 of SEBI's 2008 code on conflict of interests for members of its board. Khera added that he is challenging the SEBI chief to come out and deny the charges against her.

The documents shared by Congress showed that the SEBI orders pertaining to Wockhardt were passed by a single adjudicating officer named Vijayant Kumar Verma. Buch served as a whole-time member of SEBI between 2018 and 2021 before taking over as chairperson in March 2022.

SEBI, in an order dated 2 March 2023, stated that Vijay Khetan, a former compliance officer of Wockhardt, had paid ₹27.06 lakh towards a settlement for failing to disclose price-sensitive information in 2013.

As per SEBI's website, the regulator ordered a settlement of ₹27.06 lakh from Vijay Khetan, a former compliance officer of Wockhardt, for failing to disclose price-sensitive information in 2013, followed by related settlement orders on 22 May and 31 July last year.  

Also Read: SEBI employees protest outside Mumbai office, demand chairperson Madhabi Puri Buch’s resignation: Report

SEBI was investigating Wockhardt Limited for various cases, including insider trading during 2023. Khera asserted that this was an outright case of corruption that invoked conflict of interest, violating sections 4, 7 and 8 of SEBI's 2008 code on conflict of interests for members of its board. Khera added that he is challenging the SEBI chief to come out and deny the charges against her.

As per extant laws, Buch, while being a SEBI's whole-time member or the chairperson, is liable to adhere to SEBI's principles, which state that a member shall take all steps necessary to ensure that any conflict of interests to which he/she may be subject to does not affect any decision of the board.

Further, according to SEBI's guidelines, a Sebi member needs to disclose any interests that may conflict with their duties, and they cannot exploit to their personal advantage any personal or professional relationship with regulated entities or any employee of such entities.

Khera pointed out that previous SEBI chairpersons went to great lengths to avoid even the appearance of a conflict of interest, both in their roles at SEBI and in their earlier positions. He asked why no effort was made to verify whether Buch would follow these established standards.

Also Read: ‘How can retirement benefits exceed salary from ICICI?’ — Congress fires fresh ammo at SEBI chief Madhabi Puri Buch

"Or was this lack of scrutiny part of a mutually beneficial arrangement?" Khera asked. "If the head of the regulatory body is compromised, then that head becomes pliable. Perhaps that was the objective," the Congress leader said.

Khera said he was challenging the SEBI chief to come out and deny the charges against her. On Thursday, Congress demanded an independent inquiry into the matter, asserting that it was in the national interest to have a probe as foreign investors were getting concerned and there were doubts about the integrity of India's stock markets.

After the Congress' attack, shares of Wockhardt on the NSE fell five per cent to ₹1,034.55 apiece at close of trading on Friday, when the benchmark Nifty 50 index lost 1.17 per cent, or 292.95 points, to settle at 24,852.15.

Last week, the Congress had alleged that since the current SEBI chairperson took office in 2017, she was not only drawing a salary from SEBI but also holding an office of profit at ICICI Bank, continuing to receive income from it.

Subsequently, ICICI Bank said it had not paid any salary or granted ESOPs to Buch after her retirement on October 31, 2013, as alleged by Congress. The Congress, in turn, questioned ICICI Bank's assertion that it had not paid any salary or granted ESOPs to the SEBI chairperson after her retirement and asked that if the amount paid to her was her "retiral benefit", why it was non-uniform -- both in terms of its frequency and amount.