The Hindu Business Line : SEBI team to oversee pending proceedings with NSDL

The Securities and Exchange Board of India’s on-going proceedings against the National Securities Depository Ltd(NSDL), the country’s premier depository, over the IPO scam investigations of 2006 would now be overseen by a three-member team comprising part-time members of the SEBI Board. An eminent legal expert would also be associated with the team for providing professional advice.

The Finance Ministry has said the pending matters should be handled by a team of non whole-time SEBI members who were not party to the initiation or processing of such proceedings. It has advised the SEBI Board to ensure that Mr C.B. Bhave, the newly appointed Chairman of SEBI, is not drawn into the handling the matters of SEBI’s proceedings against NSDL.

Recusal requested

“Neither Mr Bhave, who was heading NSDL, nor the nominee of the Ministry of Finance on the SEBI Board will be involved in the special arrangement. These proceedings will be overseen by a three-member team comprising part-time members of the Board,” a Finance Ministry release said.

This would imply that Mr Bhave need not, as SEBI Chairman, decide on whether the capital market regulator should proceed in appeal in Supreme Court against NSDL, the very organisation he was heading prior to being appointed as SEBI Chairman.

The move to ask a SEBI Board team to oversee the existing proceedings comes in the wake of Mr Bhave’s request that he be recused from SEBI’s proceedings relating to NSDL. After its IPO scam investigations in 2006, SEBI had asked NSDL to pay Rs 50 crore as ‘disgorgement’ of undue profits that it had earned with others. This was set aside by the Securities Appellate Tribunal (SAT) and SEBI has so far not challenged this SAT order.

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SEBI team to oversee pending proceedings with NSDL