Everybody has all but assumed that SEBI chief CB Bhave is not getting an extension. Will they be surprised?
On Friday, 10th December, CB Bhave, the current chairman of the Securities and Exchange Board of India delivered what was considered a hard hitting piece on autonomy of regulators at the A D Shroff Memorial Lecture. CNBC TV18 anchors called it his ‘swan song’. Other sections of the media proclaimed too that an extension for the incumbent SEBI chairman was out of the question now. Is it?
Mr Bhave had made a pitch for independence and autonomy of regulators saying, "If regulators have to depend on the executive for the release of funds, the question of independent behaviour by the regulators will be jeopardized. It is necessary to carefully consider the pros and cons of taking (away) the financial autonomy from the regulators”. He also mentioned that "regulators do not enjoy protection in terms of the conditions under which their service can be dismissed by the executive," but admitted that this had never been done. Clearly, it seemed that he was in a reflective mood and that can happen when it is clear that he was going.
However, sources in Delhi insist that the game is far from over. They say that it was not by chance that a few weeks ago the Prime Minister’s Office (PMO) wrote to the Finance Ministry to ask why Mr Bhave should not be given an extension. We also learn that although the Finance Ministry has explained its position, the PMO is apparently “putting a lot of pressure” to give Mr Bhave an extension.
Hence, when the selection committee meets on Monday, 13th December, Mr Bhave will be very much in the running for the job although he will neither appear before the selection committee nor appear eager for the post. There is a sense of déjà vu to this situation. Last time around, Mr Bhave appeared for the interview but told the selection committee that he did not want the assignment because of cases pending against the National Securities Depository Limited (NSDL), which he then headed. He also took the opportunity to tell the board about why he felt persecuted by the then SEBI Chairman M Damodaran.
This time around, there are plenty of people feeling just as persecuted by Mr Bhave’s actions and decisions. The most famous of course is the MCX group’s struggle against the series of pro-National Stock Exchange actions by SEBI. The BSE is equally aggrieved, but under its present chairman, S Ramadorai (former chairman of TCS Ltd, who has a close equation with Mr Bhave) has been publicly silent about its issues.
Recently, even the Sahara Group did the unthinkable and issued full-page advertisements across the media to protest what it called the “irresponsible & wrongful ex-parte order” which had left it “sadly astonished”.
These are not the only ones. The entire mutual fund industry has been quietly waiting for the ‘Bhave reign” to end, so have Independent Financial Advisors, so are BSE brokers, who see the value of their shareholding vanish (valued at around Rs4.5 crore) if the report of the Bimal Jalan Committee, set up under Mr Bhave is accepted.
Incidentally, CNBC TV18 also had the market all a-flutter by announcing that an Executive Vice President of Tata Capital, Himadri Bhattacharya, was hot in the race for the post. The other names apparently are R Bandyopadhyay, secretary in the Ministry of Corporate Affairs, GP Singhal, finance secretary Madhya Pradesh, UTI Mutual Fund chief UK Sinha, RBI deputy governor KC Chakrabarty and Dr KP Krishnan, former joint secretary, Finance Ministry.
The market has not even heard of Mr Bhattacharya and given how the Delhi bureaucracy thinks, many believe that he is not senior enough to be a contender. Some say that the name has been included because of the Pay Commission recommendation that private sector talent should also be considered for these appointments. But, as a wag says, “anything is possible in the SEBI chairman’s appointment. The last three chairmen were not in the shortlist of three names that had been sent to the Prime Minister, so don’t be surprised if an entirely new name is sprung on the market too”.