While on the ambiguous governance standards at SEBI, most people have forgotten Dr Mohan Gopal, the SEBI director who was part of the two-member bench (former RBI deputy governor Leeladhar was the other member), whose order was discarded, discredited and declared ‘null and void’ by the SEBI board in order to protect chairman CB Bhave. The orders had been suppressed for a year and made public (and simultaneously rejected) only after a public interest litigation (PIL) filed in Hyderabad forced SEBI’s hand. At that time, Dr Gopal was all set to submit a stinging resignation letter and even planned to file a PIL to challenge the board’s action. But, all of a sudden, he turned completely silent. Stranger still, he did not even resign from the SEBI board. Also, while he was easily accessible to the media earlier, he is now unavailable. He refuses to answer questions and turns testy when asked why he has not resigned. Even his supporters claim ignorance over his mysterious silence, especially after Dr Gopal had convinced Justice JS Verma to provide a rare legal opinion on whether or not the SEBI board could ignore an order of its bench.
Intriguingly, SEBI is just as quiet about Dr Gopal’s disappearance. Its latest annual report shows that Dr Gopal has attended only one board meeting in 2009-10 out of nine and it seems fairly certain that he did not attend any meeting in the last phase of his term which comes to an end soon. Wouldn’t good governance norms require that Dr Gopal should have either attended meetings or stepped down? His sudden silence is a mystery that certainly does no credit to SEBI.
On the other hand, one may recall that SEBI preferred to ignore C Achuthan’s (former presiding officer at the Securities Appellate Tribunal) opinion over that of a respected Supreme Court judge to declare the orders against NSDL ‘null and void’. While Dr Gopal has vanished, Mr Achuthan is flying high. He was soon asked to head a powerful committee that will completely overhaul India’s takeover regulations. The committee included a lawyer, who appeared for NSDL in its battle against SEBI (when Mr Bhave was NSDL chairman). The same committee’s recommendations will also eliminate the reverse book-building route to delisting. Mr Achuthan, in a recent media interview, said that the new takeover regulations will be announced in December 2010, just a little before Mr Bhave’s term with SEBI ends, over what was an extremely tumultuous period for market intermediaries and Indian investors. — Sucheta Dalal