New Delhi: Madhabi Puri Buch’s ‘Singapore Connection’: The Indian stock market, where investors invest their hard-earned money, is today grappling with some serious questions. Had the country’s largest regulator, SEBI, itself become an arena for such a ‘profit game’ where rules were ignored and a select few benefited? The question has become even more profound after the Jane Street scandal.
The story is not just about a regulatory failure but about the tenure of former SEBI chairperson Madhabi Puri Buch, her decisions, and the serious allegations of ‘personal interest’ against her.
The story is not just about the looting of Rs 4,843 crores by an American firm. As per sources, this figure can reach up to Rs 1 lakh crore. This is the story of the tenure of former SEBI chairperson Madhabi Puri Buch, who is now facing serious allegations not only of failure but also of ‘vested interest’.
Betting ‘Arena’ – The ‘Game’ of Weekly Expiry
Madhabi Puri Buch is accused of preparing the ground for a scam like Jane Street with the introduction of Weekly Options.
How did market picture change?
Earlier, the derivatives market had monthly expiry, which kept speculation under control to some extent.
But under Buch’s leadership, weekly expiry started.
This step changed the market’s character. It gave high-frequency traders (HFT) and big speculators an open field to make profits every week.
Volatility in the market increased manifold, and the risk for retail investors started skyrocketing.
‘Drama’ of reducing F&O
Interestingly, on one hand, she opened the door for speculation with weekly expiry, on the other hand, she kept preaching on the dangers of F&O trading in public forums and ‘pretended’ to reduce it.
This was a contradictory move, which experts question.
Was this a deliberate strategy to keep retail investors away from the market and clear the field for big HFT players like Jane Street?
‘Singapore connection’ and conflict of personal interest
When decisions taken by a regulator benefit a particular group, the question of ‘conflict of interest’ is bound to arise.
In the case of Madhabi Puri Buch, this allegation is very serious and direct.
According to sources, the allegation is that Madhabi Puri Buch had personal investments through her Singapore-based family route in certain funds that were making huge profits by using the same high-frequency and derivative strategies as Jane Street.
Why was there no investigation?
This ‘personal interest’ was most likely the reason why Buch never showed any interest in initiating an investigation into the matter, even though NSE (National Stock Exchange) had given her full information about this suspicious trading pattern and was also doing constant follow-up.
It is alleged that she was probably using her position to secure her personal profits while retail investors were losing their money.
True size of scam: Not Rs 4,800 cr, but Rs 1 lakh cr looted?
The preliminary investigation conducted by the new SEBI leadership has pegged Jane Street’s illegal profits at Rs 4,843 crore.
But this figure is probably just the tip of the iceberg that lies beneath the water.
Sources told Zee Business that the actual size of this well-planned scam could be up to Rs 1 lakh crore.
Others may also be involved
It has also been revealed that Jane Street was not the only player in this game.
Three to four other associated firms were also using similar tactics, which are now under investigation.
This shows that this was not a single incident, but an organised operation, which was given a free hand under SEBI’s supervision.
Controversies Are Not New to Buch: From Hindenburg to Congress
Madhabi Puri Buch’s tenure has been surrounded by controversies and questions from the very beginning.
The Jane Street scandal may be the most explosive chapter in this series, but it is not the first.
When Hindenburg released its report on the Adani Group, the eyes of the whole world were on SEBI.
The report contained serious allegations of manipulation of funds through shell companies, which were SEBI’s job to investigate.
But even at that time, serious questions were raised about the speed and direction of SEBI’s investigation under the leadership of Buch.
Congress’ direct allegations
The Congress party has also made serious allegations against Madhabi Puri Buch from time to time by holding press conferences.
The party had raised questions not only on her policies but also on the process of her appointment, due to which a question mark was put on her impartiality from the very beginning.
Worrying picture
These allegations against Madhabi Puri Buch’s tenure are serious.
Approving weekly expiries, ignoring warnings, and alleged conflict of personal interests – all these links together create a worrying picture.
New SEBI chief Tuhin Kanta Pandey has made a start by taking action, but now there is a need for an independent and impartial investigation that gets to the bottom of this whole ‘game’ and ensures that in future, no regulator can use its position for personal interests.
What sources told
– Buch had vested interests, as she had some investments via her Singapore family route. So she never was keen enough to start the investigation even though NSE sent her all the details and kept their follow-ups.
– She was enjoying her profits made in thousands of crores.
– NSE sources say that since January 2024, they have been flagging noticeable spikes to SEBI, but the cautions have been falling on deaf ears.
– Before January 2024 also, there were spikes, but they were not big and were reported as procedure.
– Sources say that she had invested via the FPI structure in Singapore and was busy enjoying profits, so she did not pay any heed to the red flags.
