ICICI Bank junks Congress claims, denies paying salary or ESOPs to SEBI chief Madhabi Puri Buch after retirement

ICICI Bank has denied claims that it paid any salary or granted Employee Stock Ownership Plans (ESOPs) to Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch after her retirement from the bank. The statement came after allegations from the Congress Party, which suggested Buch received ₹16.8 crore from ICICI Bank since 2017, creating a conflict of interest given her regulatory role at SEBI.

According to ICICI Bank, Buch retired in October 2013 and has not been compensated with a salary or ESOPs since. The bank clarified that any payments made to her after retirement were accrued during her tenure with the ICICI Group, covering retiral benefits and ESOPs. The bank emphasized that its ESOP policy allows employees, including retirees, to exercise their options for up to ten years after vesting, in accordance with Income Tax rules. This means Buch’s financial benefits were tied to her time at the bank, not her current role at SEBI.

Congress spokesperson Pawan Khera accused Madhabi Puri Buch of continuing to receive substantial income from ICICI Bank while serving as a full-time SEBI member from April 2017 and later as Chairperson from March 2022. The Congress Party calculated that the ₹16.8 crore Buch allegedly received from ICICI Bank is 5.09 times the amount she earned at SEBI during the same period. This, they argue, raises serious questions about potential conflicts of interest and the integrity of India’s financial regulatory framework.

However, ICICI Bank rejected these claims, stating that the payments were legally compliant and part of standard employee benefits. The bank explained that the difference between the market price of the stock on the day of ESOP exercise and the allotment price is treated as perquisite income under Income Tax rules. ICICI further noted that Form-16 reflects this income and any payments towards retiral benefits of former employees.

Madhabi Puri Buch’s tenure at ICICI Bank spanned several years, during which she served in senior roles, including as the CEO of ICICI Securities from 2009 to 2011. She opted for superannuation in 2013 and later transitioned to the public sector, joining SEBI in 2017 and becoming its Chairperson in 2022. The recent controversy adds to the scrutiny around Buch, particularly following claims by Hindenburg Research that she and her husband had stakes in offshore entities allegedly linked to the Adani Group’s financial dealings. Both Buch and her husband have denied these allegations, emphasizing their investments were made years before her appointment at SEBI.

Is there a conflict of interest?

The allegations against Buch and ICICI Bank touch on broader concerns about conflicts of interest when former private sector executives take up roles in public regulatory bodies. While ICICI Bank maintains that all payments to Buch were above board and accrued from her past employment, the optics of the situation have led to heightened scrutiny. Experts argue that this situation underscores the need for stricter rules governing post-retirement benefits for individuals transitioning from the private sector to regulatory positions. Transparency, they suggest, is key to maintaining public trust in financial regulators like SEBI, which play a crucial role in overseeing market integrity.

What lies ahead for ICICI Bank and SEBI?

The controversy surrounding Madhabi Puri Buch could prompt SEBI and other regulatory bodies to review their policies on potential conflicts of interest, especially for key positions. If substantiated, Congress’s allegations could lead to further inquiries or policy reforms aimed at tightening governance standards. ICICI Bank’s detailed defense suggests they are keen to put the issue to rest, but the unfolding political and media attention may lead to more revelations.