CBI comes in the way of Sebi plans
MumbaiThe investigation being undertaken by Central Bureau of Investigation (CBI) has becoming a stumbling block in the way of a move by the Securities & Exchange Board of India (Sebi) management to promote its executive directors as full-fledged members of the Sebi board.
Sources say, some members of the Sebi top brass were lobbying for an elevation to the Sebi board, which now looks unlikely as certain sections of the government are against such promotions.
Sources said, the CBI, was still enquiring into the CRB Capital Markets case and into the role of Sebi executive director Pratip Kar.
The Central Vigilance Commission has also reportedly endorsed the decision of the CBI recommending departmental action against Kar for his alleged role in sanctioning a mutual fund licence to C R Bhansali.
While the CBI so far is understood to have given a clean chit to Sebi chairman D R Mehta in the case relating to the role of RBI in granting a banking licence to CRB Capital Markets, Mehta's alleged proximity to stockbroker Rakesh Mehta (involved in the UTI-Cyberspace scandal) is under probe.
Sebi's executive director (legal) Dharmishta Rawal has also recently come under suspicion since she was Sebi's nominee on the governing board of the Calcutta Stock Exchange, now been found to have consistently breached several requirements of law.
Sebis proposal has met with hurdles from other areas too. The representative of the RBI on the Sebi board in terms of Section 4 of the Sebi Act has always been a deputy governor of the RBI. The latest entrant to the office of the executive directors, R M Joshi, is not of the rank of a deputy governor and can, therefore, not be equated with an RBI deputy governor who is nominated to Sebi's board.
The other officials of the ministries of the Government of India who are nominated to the Sebi board are always at least of the rank of joint secretary to the government. However, none of Sebi's present executive directors is of the rank.
Informed sources say while the government's intent was to bring in more independent persons onto the Sebi board, it will also ensure that the position of Sebi's board of directors is not eroded.
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