‘Petition against Sinha was to protect vested interests of business lobbies’

Shishir Sinha
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U.K. Sinha
U.K. Sinha

The Supreme Court has observed that the anxiety of ‘some very powerful business houses’ for removal of U.K. Sinha as SEBI Chairman is not unthinkable.

The Supreme Court, on Friday, upheld Sinha’s appointment, saying it was done fairly and in accordance with the established procedure.

The apex court also questioned the motive of the petitioner while terming the letter of former SEBI member K.M. Abraham to the Prime Minister “motivated”. The petition was filed by Arun Kumar Agarwal against the appointment of Sinha. appointed as SEBI chief on February 18, 2011, for a period of three years.

In its 85-page order dated November 1, the apex court dismissed the public interest litigation and observed that “SEBI has been active in pursuing a number of cause celebre against some very powerful business houses”.

“Therefore, the anxiety of these business houses for the removal of the present Chairman of SEBI is not wholly unimaginable,” the Bench consisting of Justice Surinder Singh Nijjar and Justice Pinaki Chandra Ghosh said in its judgment.

SEBI action

The judgment explained this by quoting an affidavit, which narrated the action taken by SEBI against very influential and powerful business houses, including Sahara Group and Reliance Industries Ltd (RIL). It may be noted that SEBI had filed a contempt petition against Sahara in the Optionally Fully Convertible Debenture (OFCD) issue, and had refused to consider a consent application filed by Mukesh Ambani-led RIL in an alleged insider trading case as directed by the Securities Appellate Tribunal.

Dismissing the petition, the Bench observed that it examined the entire issue not to satisfy the ego of the petitioner, but to demonstrate that it was not entirely inconceivable that a petition disguised as “public interest litigation” can be filed with an ulterior motive or at the instance of some other person who hides behind the cloak of anonymity, even in cases where the procedure for selection has been meticulously followed.

“This is not a petition to protect the fundamental rights of any class of downtrodden or deprived section of the population. It is more for the protection of the vested interests of some unidentified business lobbies,” the Bench observed.

The petition also mentioned former SEBI whole-time member Abraham’s letter to the Prime Minister, complaining that Sinha was being “directly influenced” by the Finance Minister or Advisor to the Finance Minister. However, the Bench observed that the allegations made in the letter were without any basis and clearly motivated. Further, a perusal of the record clearly reveals that several complaints were filed against Abraham, wherein some serious allegations have been made against him in relation to his tenure as whole-time member of SEBI.

“Also, it was only after the Ministry of Finance decided not to extend his tenure as whole-time member, SEBI, and advertisements for new appointments were issued that Abraham started complaining about interference of the Ministry of Finance in SEBI through the present Chairman,” the judgment said.

The Bench also observed that the letter was written merely a month and a half before his tenure was to end. “It is manifest that the letter written by Abraham was clearly motivated and espouses no public interest,” it said.

(This article was published on November 3, 2013)
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