The Supreme Court has pulled up the Indian government for the delay in appointment of judges to the Securities Appellate Tribunal (SAT). Almost 500 cases are pending in the Tribunal for want of a judicial member. The posts of presiding officer and judicial member have been lying vacant since then and CKG Nair, the (lone) technical member of SAT has been passing orders on a daily basis. (Read: SC To Decide if Single Technical Member of SAT Can Stay SEBI Order
The presence of a judicial member is mandatory on every bench. As on date, there is only one member (Tech), Dr CKG Nair. This raises serious apprehensions if the delay is being caused by design to perhaps bail out Price Waterhouse (PW) and some other lucky ones. The facts seem to suggest this.
Securities and Exchange Board of India (SEBI) vide its order on 10 January 2018 had restrained, for two years, all the 10 audit firms referred to as ‘PW entities’ from doing any audit related work of listed entities and intermediaries registered with the market regulator.
The restraining order was passed over the alleged collusion of PW network with directors and employees of the erstwhile Satyam Computer Services Ltd (Satyam), in the country’s biggest corporate accounting scandal.
SEBI’s order was effective immediately but was not to affect audit assignments relating to financial year 2017-18. PW network filed an appeal with SAT, which, vide its order on 15 February 2018, allowed the firm to audit existing clients till 31 March 2019 or until a new bench was formed, whichever was earlier.
Verdict of the new bench could have gone against PW network. This eventuality may have been taken care of by ensuring that new members were not appointed.
Interestingly, Jog Singh retired on 19 February 2018, just four days after SAT’s order. The presiding officer, JP Devdhar, who recused himself from the PW network case, retired on 11 July 2018. Had he not recused, the PW network case could have been heard as late as July 2018. But perhaps that was never intended. PW network was given extended time, prima-facie, surreptitiously.
Non-filling of the vacancies in SAT is baffling given that the retirement dates of the members were well known in advance. Two members of SAT retired after completing a five-year term and the vacancies were not caused by any abrupt exit.
Mr Singh had been a member since 20 February 2013. Mr Devdhar had been a member since 12 July 2013. Interestingly, the SAT order has not been uploaded on its website till the time of writing this article even though the author had brought this to the notice of SAT vide his letter dated 12 March 2018.
Of course, contrary to public perception, the wheels of justice can move very fast provided you are rich and powerful. Hearings can be delayed endlessly; appeals can be heard at midnight.
SEBI’s order of 10 January 2018 against Price Waterhouse had prima-facie
overlooked a major criminal conspiracy
despite taking nine long years. Twice it even missed the deadlines set by the Supreme Court which had castigated it for unnecessary delays. SAT’s benevolent order took just one month! When the new bench will be formed is anybody’s guess.
The intention seems to be clear. Delay as much as possible, public memory is short, something bigger will come. This prayer has also been answered. We now have the IL&FS fiasco which dwarfs Satyam.
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(Sarvesh Mathur is a senior financial professional, who has earlier worked as CFO of Tata Telecom Ltd and PricewaterhouseCoopers.