MUMBAI (Reuters) -Indian automaker Mahindra & Mahindra and pharmaceutical company Dr Reddy’s Laboratories said on Tuesday they had paid the husband of a senior regulatory official for work when she held the second highest office at the country’s market regulator, but denied any conflict of interest.
India’s main opposition party Congress on Tuesday alleged that Dhaval Buch, husband of Madhabi Puri Buch who now heads the Securities and Exchange Board of India (SEBI), earned 47.8 million rupees ($569,251) from Mahindra at a time when the regulator was investigating it for market infractions.
Congress did not provide any proof for its allegations.
In a disclosure to stock exchanges on Tuesday, Mahindra said: “Compensation has been specifically and only for Mr. Buch’s supply chain expertise and management acumen, based on his global experience.
“We categorically state that we have not, at any point, requested SEBI (Securities and Exchange Board of India) for any preferential treatment,” Mahindra said.
The company added that they considered allegations made by a political party “false and misleading in nature”.
Separately, two other listed companies Dr Reddy’s Laboratories, Pidilite Industries also informed stock exchanges that they had engaged the services of Buch when his wife held second highest office at SEBI but denied allegations of any conflict.
Dr Reddy’s paid 658,000 Indian rupees to Buch in exchange of his services, the company said.
“Any suggestion that the company was treated differently by SEBI as a result of this would be baseless and mala fide,” Dr Reddy’s said.
Pidilite said that it has never been under any SEBI enquiries or orders.
Email queries sent to SEBI’s spokesperson and Buch were not immediately answered.
The finance ministry, which oversees the markets regulator, did not respond to questions on whether it believes the allegations warranted an investigation.
Buch has been at the centre of a storm following accusations by Hindenburg Research that she and her husband previously held investments in offshore funds also used by the Adani Group, which is being investigated by the regulator. She has denied the accusations.
The Congress party, which held protests across the country last month, has sought Buch’s resignation.
Prime Minister Narendra Modi’s government has refused to give in to the opposition’s demands.
($1 = 83.9700 Indian rupees)
(Reporting by Jayshree P Upadhyay; Editing by Kim Coghilland David Evans)
