A set of high-profile retired government officers have filed a public interest litigation (PIL) in the Supreme Court of India (SC) challenging the composition of the search-cum-selection committee to shortlist the chairman and members of SEBI. According to a report in The Times of India on 27th August, the SC disapproved of the personal attack on finance minister Pranab Mukherjee, contained in the petition. Legal sources said that the petition will be filed again after removing the offending remarks. However, the contents of the petition are not known so far. According to the news report, the petitioners comprise Air Chief Marshal S Krishnaswamy (retd), former Mumbai supercop Julio Rebeiro, former CBI (Central Bureau of Investigation) joint director BR Lall and Professor HC Pande. The four were also part of a group that filed a petition for the removal of former CVC (chief vigilance commissioner) PJ Thomas.
At the time of going to press, I received a call from an advocate who said that the PIL intended to seek the removal of the SEBI chairman. Interestingly, the caller seemed unaware that appointments to SEBI had been fairly strange, to put it mildly, even in the past. For instance, CB Bhave was appointed SEBI chairman, despite the National Securities Depository Ltd (NSDL), which he headed for over a decade, being indicted in the IPO (initial public offering) scam. NSDL had challenged the SEBI order. The finance ministry claimed to ‘ring-fence’ Mr Bhave from the NSDL investigation, which only caused serious embarrassment to the regulator later. Similarly, MS Sahoo, a member-secretary to the selection committee (as director, finance ministry) was suddenly declared the selected candidate—no questions asked about the lack of propriety involved.
Even this time, there is this lurking suspicion that many of Dr KM Abraham’s charges against the finance minister and the incumbent SEBI chairman are only intended to obfuscate the investigation into his purchase of an apartment in the Kohinoor complex, where the National Stock Exchange (which they are accused of favouring) had purchased huge property and a block of apartments for its senior executives. Hopefully, the PIL would formalise and clean up the process of deciding senior appointments at SEBI. Today, the unseemly lobbying and desperation to bag these attractive assignments (which come with enormous power and perks, including plenty of foreign travel and generous allowances) signal a clear need for transparent selection. However, the petition would make more sense if the petitioners had any knowledge or concern about investor protection and the worrying exodus of retail investors from the market.