Angry investors plan to keep a close watch on SEBI’s spending binge this time.
The Securities and Exchange Board of India’s (SEBI) decision to splurge over Rs280 crore on property acquisitions, under UK Sinha, has raised many eyebrows and caused a lot of heartburn among other investigation agencies. SEBI, says a media report, will be spending eight times its 2011-12 budget on buying residential and commercial property. Much of this will go into buying apartments at extraordinarily high rates (notice how developers are still holding on to high property rates in south Mumbai, where top SEBI executives have lavish four- and five-bedroom apartments) for senior executives. Also, it apparently wants more commercial space near SEBI Bhavan at the posh Bandra-Kurla complex. This too is intriguing, since the recently constructed SEBI Bhavan ought to have estimated its office space requirements for at least a decade. Moreover, most sectors under SEBI’s regulatory ambit are in the doldrums—mutual funds have no takers; there is little interest in the Registrar & Transfer business; the investor population has shrunk to a third; and only select initial public offerings (IPOs) attract public interest. This is evident from the expected drop of over Rs11 crore in SEBI’s income from fees collected from intermediaries. SEBI has apparently justified this expenditure to its board claiming that “Physical proximity of SEBI office to investors and intermediaries would promote deepening and broadening of the securities market.” This is laughable and truly ironical. Under Mr Sinha, SEBI has the least interaction with investors. A media report says, SEBI’s total capital expenditure will quadruple this year to Rs377 crore resulting in a Rs275-crore deficit for FY12-13. We learn that angry investors plan to keep a close watch on SEBI’s expenses this time.