The Congress has kept up the pressure on Madhabi Puri-Buch by accusing the Sebi chairperson of failing to disclose that she had earned rental income from an affiliate of pharmaceutical giant Wockhardt at a time when it was being investigated by the market regulator for insider trading.

This is the fourth fusillade in a volley of accusations that the Congress has fired at the Sebi chairperson who has been embroiled in a “conflict of interest” controversy that many believe has severely compromised the probity of the regulator.

Congress spokesperson Pawan Khera said Puri-Buch had received a rental income of ₹2.16 crore from Carol Info Services Ltd — an affiliate of Wockhardt — between 2018 and 2024.

Puri-Buch joined Sebi as a whole-time member in March 2017 and became its chairperson in March 2022.

At the media conference, Khera ratcheted up the pressure on the Modi government by lobbing two provocative questions: first, was the Sebi chairperson’s appointment in March 2022 approved with the understanding that she could maintain prior financial ties as long as she aligned with the Prime Minister’s wishes?

Second, why was there no effort to ensure Puri-Buch adhered to conflict of interest standards, unlike her predecessors, or was this oversight part of a mutually beneficial arrangement?

“This is an outright case of corruption that invokes conflict of interest violating Sections 4, 7, and 8 of Sebi’s 2008 Code on Conflict of Interests for Members of Board,” the Congress said in a press release.

Section 4 of the Code for members of the Sebi Board requires a member to “disclose his or her interests which may conflict with his/her duties”.

Section 7 of the Codesays that if a member isdirectly or indirectly interested in any matter, he “shallnot take part in any deliberation or discussion of theBoard with respect to such matter except to extent of professional advice if sought by the Board”.

And finally, Section 8 says: “No member shall hear or decide any matter where he has a conflict of interest.”

The Congress expressed concern over the fact that Puri-Buch has remained unfazed by the staccato revelations of her conflicts of interest.

Roller-coaster ride

Wockhardt Ltd has been under investigation by Sebi for various offences including insider trading since September 2022 when a showcause notice was sent to it for an inexplicable surge and collapse in the stock’s price between January 7, 2012, and August 7, 2013.

In the first stage, the stock leapt by 655 per cent over a 14-month period from ₹273.25 on January 7, 2012, to ₹2,065 on March 8, 2013.

The stock then floundered in May that year after the US Food and Drugs Administration (FDA) issued an import alert against the drug maker and carried out an investigation of its Waluj factory — price-sensitive information that the company did not immediately disclose to the stock exchanges.

Worse, there were accusations that certain key officials had traded in the company’s stock when they were privy to information that the market wasn’t.

Sebi documents show that the price of the Wockhardt stock then fell from ₹1,798.30 on May 17, 2013, to ₹1,229.70 on May 24, 2013. On August 07, 2013, the stock closed at ₹362.25.

Khera said he could not say for certain why the rental income in the first year — 2018-19 — was only Rs 7 lakh. It could be that the lease term wasn’t for a full year.