Sucheta Dalal :SEBI’s Travails Continue
Sucheta Dalal

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SEBI’s Travails Continue  

November 5, 2009

Meanwhile, SEBI continued to face its share of heat over a controversial decision to suppress the 4 December 2008 order of a two-member committee of its own board of directors on the role of National Securities Depository Limited (NSDL) in the IPO scam. In our previous issue, we reported the public interest litigation (PIL) filed by V Narayan Reddy, an investor, before the Andhra Pradesh High Court asking for the committee’s order to be made public. Mr Reddy has alleged that it was suppressed for almost a year to protect the current SEBI chairman CB Bhave from controversy, since he was the NSDL chairman during the 2006 IPO scam. SEBI had severely indicted NSDL for failure to detect multiple applications and fictitious demat accounts; the depository, in turn, had challenged these orders before SAT and won some respite as well. 


At the time of going to print, the case had been listed for another hearing on 3rd November. The petitioner had been asked to implead SEBI directors Dr Mohan Gopal (who heads the National Judicial Academy) and V Leeladhar (former deputy governor, RBI), who issued the NSDL order, as respondents. This happened when the petitioner objected to a counter to the petition filed by Parag Basu, a SEBI official, who reports to the chairman and whole-time members. We learn that the counter affirmed that SEBI’s whole-time members were barred from participating in the NSDL hearings; the question then is: Can they participate on discussions with regard to the order and its publication?

Tailpiece: If people thought that Anil Ambani was silenced after the blitzkrieg of five stinging advertisements across national dailies, they are dead wrong. The war continues in cyberspace. A blogspot titled has a series of exposes on how Reliance Gas Transportation Infrastructure Limited, which started as a subsidiary of Reliance Industries Limited, was allegedly de-subsidiarised into a private company owned by Mukesh Ambani. There is a series of allegations on Mukesh Ambani’s investments in a couple of big television companies, including a version of why Nimesh Kampani invested in the Eenadu media group of Andhra Pradesh and got into serious trouble with the late YSR Reddy. And there are plenty of posts too on the battle for gas that is raging in the Supreme Court. What makes the blog rather chilling is its tone and the wealth of details and names of private entities that have allegedly routed various investments of India’s largest industry group. At the time of going to print, we know that Mukesh Ambani’s PR machine is aware of the blog, but there have been no rebuttals or counters.


-- Sucheta Dalal