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The SEBI board has decided to release the controversial orders of its special two-member committee regarding irregularities in initial public offerings (IPO) to National Securities Depository Ltd (NSDL) for compliance.
With this, one of the SEBI's actions under the leadership of Mr C. B. Bhave may have come back to haunt him.
The committee was created to look into the role of NSDL in the IPO scam of 2003-05, which involved creation of fictitious demat accounts by key operators for cornering IPO shares meant for retail investors.
The committee's orders were critical of NSDL's role in the scam and had asked the organisation to conduct an enquiry to fix personal liability in the case. Mr Bhave was the Chairman of NSDL when the scam took place.
When he took over as head of the SEBI, he had recused himself from SEBI cases relating to NSDL citing conflict of interest. The NSDL case was handed over to the special two-member committee.
However, when this committee of SEBI passed orders critical of NSDL, the SEBI board sat on the case and declared the orders null. Later, the SEBI board (excluding Mr Bhave) sat anew on the NSDL case and finally disposed it, exonerating the depository.
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