The Securities and Exchange Board of India (SEBI) Board is today scheduled to deliberate the very issue that has landed SEBI in murky waters. The SEBI Board members are set to decide whether the series of Final Orders passed by SEBI’s own two-member committee on 4 December 2008 in relation to the 2005 IPO scam are to be published. The Board’s previous stance of suppressing the controversial order prepared by the two-member committee comprising Dr Mohan Gopal and V Leeladhar, has drawn the ire of aggrieved investors, with a couple of PILs already doing the rounds in the Andhra Pradesh High Court.
Attorney General Ghoolam Vahanvati, who is appearing for SEBI in respect of the PIL filed by a petitioner Srinivas Podichety, had earlier told the Andhra Pradesh High Court that a decision from the SEBI Board on this issue could be expected today. Moneylife has also learnt that SEBI had sought a legal opinion from a former member of the Securities Appellate Tribunal (SAT), Mr Achyutan, regarding the publication of this document. His opinion is also expected to be discussed by the Board in today’s meeting.
It is widely believed that the Final Order indicates that in addition to the failure of NSDL, there was also a failure of SEBI to protect the interest of the investors in the IPO scam of 2005 and regulate the depository system. Apart from indicting NSDL, the Final Order is also believed to indict SEBI for its failure to regulate depositories and that it has also given directions to SEBI to conduct an investigation of individuals at NSDL who are responsible for this scam. SEBI is also alleged to have ulterior motives in suppressing the document, one of which is to keep the current SEBI chairman C B Bhave from courting controversy.
In view of the many consequences likely to surface if the committee report is to be brought out into the open, it is unlikely that today’s meeting will have a positive outcome. The SEBI Board can only be trusted to come up with another refined excuse for continuing to withhold the said report.