Madhabi Puri Buch’s Sebi tenure: A legacy of reform, controversy, and resistance

Hindenburg Research, the now-defunct US short seller, alleged that Sebi’s probe into its January 2023 report on the Adani Group was compromised. The firm claimed that Buch had stakes in offshore entities linked to Adani’s alleged stock manipulation and accused her of a conflict of interest stemming from her ownership of consulting firms.

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Buch wasted no time. From Turkey, she worked with colleagues in India to formulate Sebi’s response, as her deputies scrambled to contain the fallout in Mumbai. The incident offered a glimpse into the latter half of her tenure—marked by both regulatory ambition and relentless controversy.

Appointed in March 2022, Buch was a first in many ways: Sebi’s first woman chairperson, its first leader from the private sector, and its first chief in decades without a government background. Her career spanned three decades, including stints at ICICI Bank, private equity, and the New Development Bank in Shanghai.

Yet, her tenure, which ended on 28 February, was dogged by allegations that tested Sebi’s credibility. The Adani-Hindenburg episode was a defining flashpoint, with critics accusing Sebi of slow and ineffective oversight. While Buch denied any conflict of interest, the scrutiny over Sebi’s regulatory lapses lingered, eroding investor confidence.

“While Buch denied any wrongdoing, such allegations, even if unproven, raised questions about the regulator’s impartiality and eroded public trust,” said Zubin Morris, partner at law firm Little & Co.

Buch’s Sebi tenure and controversies

The Adani-Hindenburg crisis was the most contentious episode of Buch’s tenure. Critics argued that Sebi’s response was sluggish and ineffective, exposing cracks in its monitoring mechanisms.

While Buch rejected claims of bias, the controversy reinforced doubts about the regulator’s ability to act decisively in high-stakes cases.

Read this | Sebi chairperson Buch refutes Hindenburg’s allegations as ‘character assassination’

Political heat followed. Congress leader Pawan Khera questioned Buch’s compensation from ICICI Bank, alleging she held an office of profit and received substantial post-2017 benefits. Both Buch and ICICI denied the claims, but the accusations added to the growing perception of Sebi’s credibility crisis.

Former finance secretary Subhash Chandra Garg suggested that the controversies made Buch a liability for the government. Amid intense speculation about her extension, the Union Cabinet on 27 February 2025 appointed finance secretary Tuhin Kanta Pandey as her successor.

Ruffling feathers in India’s markets

Beyond the Adani crisis, Buch’s decisions rattled market intermediaries. Brokers and investment firms pushed back against what they saw as overregulation, arguing that Sebi’s frequent policy shifts drove up compliance costs.

Some regulatory actions, though well-intended, led to unintended consequences, particularly for smaller players struggling with compliance burdens, said Sumit Agrawal, founder of Regstreet Law Advisors and a former Sebi officer.

Sebi’s regulatory moves increasingly clashed with judicial interpretations. The Securities Appellate Tribunal (SAT) and the Supreme Court intervened in high-profile cases, including Reliance’s corporate disputes, the NSE co-location scandal, and the Adani-Hindenburg fallout. Legal setbacks called into question Sebi’s decision-making and regulatory consistency.

“At the same time, there was a perception that Sebi’s approach sometimes hurt market players more than it helped,” Agrawal noted, opining that most of the orders issued by Sebi during her time adversely affected financial institutions, brokers, and investors.

“This perception of bias was troubling for market participants.”

Resistance within Sebi

Internally, Buch’s aggressive management style led to tensions within Sebi. Employees resisted her push for a corporate-style performance evaluation system, which linked career growth to rigid Key Result Areas (KRAs).

Critics said the new system ignored external constraints—particularly in legal departments, where case outcomes often depended on factors beyond employees’ control. Some former Sebi officers claimed that previous leadership had taken a more balanced approach to performance reviews.

Resentment grew over strict monitoring measures, including geo-tagging employees’ office hours and a leadership style some described as high-handed.

She had a ‘highway or my way’ attitude, which signalled mistrust in her employees, said a former Sebi official. “That hurt morale.”

People Mint spoke to, who had previously worked with Buch, unanimously described her brusque manner in professional settings, saying it deterred whatever good she could have done. Others noted that she lacked empathy for employees, which further alienated Sebi’s workforce.

Garg commented that the employee protests reflected a broader reluctance to work under her leadership style, rather than mere resistance to policy changes.

Still, with India’s markets seeing a surge in trading activity, some insiders argued that Sebi’s workload had naturally increased and employees would eventually adapt.

“With hundreds of IPOs coming in, methods of data collection and processing had to evolve. Employees recognized this shift,” said Sidharth Kumar, a senior associate at law firm BTG Advaya.

Kumar also pointed out that Sebi had historically acted with urgency when necessary. He cited how, under former Sebi chairman Ajay Tyagi, the regulator had swiftly operationalized 15 special courts to handle securities-related offenses within four months—a contrast to the legal bottlenecks seen under Buch’s tenure.

While Buch’s private-sector background at ICICI Bank brought a results-driven mindset, some said Sebi wasn’t ready for her pace. “People struggled initially, but many eventually adapted,” said a senior Sebi official. “She was a great listener—provided your ideas were backed by data.”

Buch’s data-driven approach also set her apart in public engagements. Unlike her predecessors, she didn’t stick to prepared speeches. Instead, armed with a wireless slide presenter, she paced the stage, using graphs and data-heavy slides to drive home her points.

That approach changed after Hindenburg’s allegations in August 2023. Buch largely avoided public appearances until December 2024. However, after the Ministry of Finance advertised the Sebi chairperson vacancy, she resumed engagements, focusing on financial inclusion initiatives.

Buch also sought to modernize Sebi, pushing for fintech adoption and tighter market regulation. “Under her leadership, Sebi saw an influx of committees, working groups, and consultation papers,” said Agrawal. In just three years, over 800 amendments and regulatory changes were introduced.

But the rapid pace overwhelmed the market. “Even Sebi staff struggled to keep up,” said Sidharth Kumar, a senior associate at law firm BTG Advaya. “Frequent regulatory changes created uncertainty, making it difficult for firms to adapt.”

Buch’s policies also fuelled employee unrest. Protests erupted over Sebi’s rigid performance metrics, prompting the regulator to initially dismiss the dissent as external influence—only to backtrack after silent protests gained traction.

“Efforts to push a private-sector culture where performance was closely monitored clashed with Sebi’s long-standing bureaucratic style,” said Kumar. Career officials, he added, struggled to adapt to the sudden cultural shift.

Buch’s legacy: Investor protection and market overhaul

Despite the backlash, Buch’s tenure saw major policy reforms.

Buch pushed for market modernization, most notably implementing the T+1 settlement cycle in January 2023 and advancing to T+0 by 2024—making India one of the first countries globally to adopt such rapid transaction settlements. The move aimed to improve liquidity and reduce settlement risks, strengthening India’s appeal to both domestic and foreign investors.

She also prioritized regulatory simplification, particularly for startups and alternative investment funds (AIFs), streamlining compliance norms to encourage growth in these sectors. At the same time, she cracked down on market malpractices.

One of Sebi’s most decisive actions under her leadership was in the NSE co-location scam, where certain brokers gained unfair access to trading data.

“She was determined to make an impact,” said Morris of Little & Co. “Her handling of the NSE case showed Sebi’s willingness to take on powerful market players.”

Buch also introduced stricter disclosure norms for IPO-bound companies, requiring large investors to wait longer before offloading shares. Investors could sell only 50% of their holdings after a 30-day lock-in period, with the remaining half subject to a 90-day wait. These measures, aimed at protecting retail investors, sought to prevent pre-listing hype from leading to sudden post-listing exits by institutional players.

While her tenure was marked by regulatory intensity, some insiders noted improvements in Sebi’s operational efficiency. A lawyer closely working with the regulator, speaking on condition of anonymity, said that law firm bills were cleared far more quickly under Buch than in previous years, when payments would often take years.

In her final weeks as chairperson, Buch appeared to focus on investor protection, launching initiatives aimed at retail participation. The microSIP scheme, allowing investments as low as ₹250, was positioned as a game-changer for financial inclusion. She also introduced programmes like Chhoti SIP, JanNivesh SIP, and the Sachetization of Mutual Funds, engaging directly with retail investors to promote awareness.

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Buch personally attended investor outreach events, including one at a government-aided school in Maharashtra, where she introduced Tarun Yojana, an initiative designed to promote financial literacy among students.

All these initiatives seemed aimed at leaving behind a legacy of being pro-investor and driving innovation.

What’s next under Pandey?

New Sebi chairman Tuhin Kanta Pandey aims to restore stability, emphasizing trust, transparency, teamwork, and technology. Unlike Buch’s aggressive regulatory push, Pandey favors measured reforms, seeking a balanced approach to market oversight.

Kunal Vyas, partner at Gandhi Law Associates, said that the ministry’s decision to appoint Buch, a professional with a non-governmental service background, was a significant departure from tradition.

“However, bureaucratic appointees often bring a broader administrative experience that could align with the government’s regulatory goals,” he noted.

Pandey is expected to engage with foreign portfolio investors (FPIs) and alternative investment funds (AIFs) to address concerns and streamline regulations. His focus on “optimum regulation” signals a shift toward simplification and voluntary compliance, moving away from Buch’s rapid-fire rule changes.

Also read | How Sebi’s serial crackdown crimped F&O volumes and crashed broking-firm stocks

Even after her exit, Buch remains in the headlines. A recent legal petition attempted to drag her name into fresh controversy, though the courts dismissed it.

Still, her tenure will be remembered as one of bold transformation—a chairperson who sought to shake up India’s financial markets but, perhaps, moved too fast for her own good.