SEBI Chief Madhabi Puri Buch chose not to comment on Real Estate Investment Trusts (REITs) during an event organized by CII on Monday, citing potential conflict of interest concerns. This decision comes in the wake of allegations raised by US short-seller Hindenburg Research, accusing Buch of a conflict due to her husband's advisory role with private equity firm Blackstone, a significant player in the REIT sector. Both Buch and her husband, Dhaval Buch, have denied the allegations.
The controversy intensified with accusations that recent amendments to REIT regulations by SEBI favored a specific financial conglomerate, claims that the regulator has strongly denied. "If I utter the word REITs, I am accused of conflict of interest," Buch said at the event, emphasizing her reluctance to comment further.
REITs, relatively new to the Indian market but popular globally, offer investors access to a portfolio of commercial real estate assets, most of which are leased out, providing returns and capital appreciation. Despite the controversy, REITs remain a growing investment vehicle in India, especially with SEBI's recent implementation of regulations for small and medium REITs (SM REITs) to promote fractional ownership in real estate.
In a separate development, the Congress raised new conflict of interest allegations against Buch, urging Prime Minister Narendra Modi to address the issue as head of the appointments committee. They claim Buch has been receiving income from ICICI Bank while serving as SEBI Chairperson since 2017. SEBI has not responded to these allegations.
Despite the ongoing debate, SEBI has reported positive feedback from the industry regarding regulations on small and medium REITs, which are expected to increase investor participation in the real estate sector.