The Hindu Business Line : Tough task ahead for C.B. Bhave

Mumbai, Feb. 14 One of the foremost tasks before Mr C.B. Bhave, who will be taking over as Chairman of SEBI, would be to decide on whether the market regulator should proceed in appeal in the Supreme Court against the very organisation that he is currently heading.

SEBI had, after its IPO Scam investigation in 2006, asked the National Securities Depository Ltd (NSDL) to pay up Rs 50 crore as ‘disgorgement’ of undue profits that it had earned together with many others. This was set aside by the Securities Appellate Tribunal subsequently. SEBI has not yet challenged the SAT order before the Supreme Court.

Mr Bhave is not only currently the Chairman of NSDL but in fact was holding the position during the period when its affairs became the subject matter of investigation by SEBI going into the IPO scam. He thus,would now have to deal with the same officials at SEBI who had been probing the activities of the country’s premier depository, which he had been heading for more than a decade.

conflicts of interest

At the time of interview with the selection committee, Mr Bhave is reported to have indicated that there could be some conflicts of interest with his candidature. He was apparently referring to his spat with the market regulator as NSDL chief during the IPO case. Apparently, this did not come in the way of Mr Bhave’s selection for the top post.

Among other contenders for the post were Mr U.K. Sinha, UTI Chairman; Mr J. Bhagawati, additional secretary, Ministry of External Affairs; and Mr M.B.N. Rao, Chairman, Canara Bank.

Mr Bhave takes over from Mr M. Damodaran, whose three-year term as the SEBI chief ends this week. During Mr Damodaran’s tenure, the capital markets had seen a string of significant developments, including the rise of the benchmark Sensex to dizzy heights.

For Mr Bhave, SEBI is not a new place — he had been in-charge of its secondary market division between 1992 and 1996. He was closely associated with the development of online trading in securities.

He also had a short stint as the head of the primary market department in SEBI during 1995-96. During this time, a committee, under his chairmanship, recommended important changes such as consolidation of accounts, segmentation and deferred tax treatment as part of continuous listing requirement.

Experience plus

Unlike his predecessors, Mr Bhave comes to SEBI with the experience spanning more than a decade in the capital markets. What could have weighed most in favour of his selection is this experience — both as a key SEBI official and as NSDL chief.

“As he closely followed the market from both the sides, he knows the pulse of the market. Being the chief of NSDL, a private-sector entity, he also gained the experience in the market as a private sector CEO,” a close associate of Mr Bhave said.

After taking the reigns of NSDL, he was largely responsible for building up the fledgling organisation to its present stature. In this process he was also directly involved in investor education across the country.

Another factor that could have helped him was his low profile and non-confrontationist demeanour, which gained him some points in the corridors of power in New Delhi. In his career as a civil servant, he held various positions in Maharashtra and the Government of India, including in the Finance Ministry.

More Stories on : People | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Corporate developments

NSDL, Euroclear sign MoU

SBI rights issue to open on Monday

Realty index ends in green

Relief at last for oil marketing cos

Bull domination

Market rebounds on positive overseas signals; Sensex gains 817 pts

MFs accumulate more large caps in January

Scepticism continues to rule high

Nicholas Piramal (Rs 329.80): Buy

Day Trading Guide

IPOs have given us profits: CBoP

Bhave will be new SEBI chief

Headed the media way?

Tough task ahead for C.B. Bhave