Sucheta Dalal :SEBI files counter affidavit in response to writ petition
Sucheta Dalal

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SEBI files counter affidavit in response to writ petition  

October 28, 2009

The PIL, which was filed by the aggrieved investor in the Andhra Pradesh High Court, came up for hearing this Monday. SEBI, in response to the writ petition has filed a counter affidavit. The counter sets out the terms of the Board Resolution where SEBI decided to set up an independent committee. The resolution clearly says that whole time members were also barred from participating in the NSDL hearings. The counter also says that SEBI held a series of Board meetings after the 4 Dec, 2008 orders by the two-member committee comprising Dr Mohan Gopal and V Leeladhar. These were held because of a prima facie view that the order exceeded the terms of the reference. However, SEBI has till date not published the minutes of the meeting.

The counter was filed by Parag Basu, who is a secretary of the Board and reports to the chairman and whole time members. The petitioner objected to Mr Basu filing a counter affidavit on behalf of SEBI since that is tantamount to the chairman and WTM members filing the counter. He said that all the facts will not be brought on the record. The court asked the petitioner to implead Dr Gopal and Mr Leeladhar so that they could file an independent affidavit. The two-member committee had examined various charges levelled by the regulator against NSDL in connection with the IPO scam of 2006.

The aggrieved investor, V Narayan Reddy, had filed the writ petition in the Andhra Pradesh High Court, questioning the market regulator’s action of withholding a final order passed by its two-member committee with respect to the role of National Securities Depository Ltd (NSDL) in the IPO scam. He alleged that SEBI is not inclined to publish the order to prevent adverse consequences for Mr Bhave, as he was the chairman and managing director of NSDL when the scam occurred. He petition also indicates that the report may have indicted SEBI as well as NSDL for failure to protect investors.
-Sanket Dhanorkar [email protected]


-- Sucheta Dalal