‘SEBI should have internal mechanism to pass orders in quick time’

| Updated on: Dec 28, 2012
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The premise that SAT will overturn (SEBI’s decisions) is not correct. We go by law and procedures. — S.S.N. Moorthy, recently retired as Member — Securities Appellate Tribunal

His room is full of idols of his favourite god — Lord Ganesha. And like a true taxman, a tablet in his room says, “Health is wealth and its tax free.”

S.S.N. Moorthy demitted office as Member — Securities Appellate Tribunal last Wednesday.

In an interview to Business Line, he spoke about adjudicating on SEBI’s orders, both with and without a Presiding Officer. Excerpts:

One year with a Presiding Officer and one year without a Presiding Officer. How was the experience?

It was a rewarding and learning experience, sitting in judgment over the SEBI cases. Sitting with a judge was a great exposure to the judicial process. Unlike bureaucrats, judges are very sharp. They question the parties very fast. Since he was a judge for so many years he could get to the crux of the issue even before the party opened up.

We decided two important cases, Sahara and Price Waterhouse.

In both these cases, I could see the way a judge analyses these issues.

Sitting with the other member was also a very pleasant experience for 13 months and we acted in complete coordination.

Reaction from the bar was always very positive and the lawyers who appeared both for SEBI and the other parties were some of the best in the profession.

How did your background of being in the income tax department help?

Tax background as such might not be of any help but the appellate mechanism is almost identical.

Since I Was DG (I-T) Mumbai, I had a lot of exposure to capital markets.

How did you manage such a short turnaround time in the Sahara case?

Three things — one, we already had the Sahara orders with us and hence had no difficulty in going into the facts.

Two, we were aware that it was a very sensitive case being watched by people and the media.

Three, they (Sahara) came to us at the 11th hour of the expiry period ordered by the Supreme Court.

We had to give them a decision very fast and we gave. Even otherwise, we are very fast in delivering judgments. This case was an urgent matter and needed a prompt response and we did it.

There is a general feeling that SAT usually overturns SEBI’s orders. Your take.

The premise that SAT will overturn is not correct. We go by law and procedures. If the balance of convenience is in favour of the appellant, the case is disposed of accordingly.

In your opinion, is SEBI able to successfully discharge its role as a regulator?

SEBI is doing a very good job. However, one problem we have seen is delay.

SEBI is one enactment where there is no time limit for completion. So if you book a case in 1990 and pass an order in 2012, what message can you give to the market?

What is the solution?

SEBI should have an internal mechanism to pass orders at a very fast pace.

Should the Government re-look at the eligibility criteria for appointing a SAT member?

It is the Government’s prerogative, a policy matter. Let them decide.

Experts say that SAT has taken a very narrow view of front-running in two of its recent judgments. What is your observation?

We have gone by the law as it stands today. The earlier provision covered all the individuals, intermediary or otherwise. But an amendment was made to confine this wrong doing (front-running) only to intermediaries. So we went by that provision.

What is the way forward on this issue?

The way forward on this is that SEBI has to take a look at it.

What are your future plans?

I have not yet decided on it. However, I would like to spend time usefully.


Published on March 12, 2018

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