Advocate seeks to be impleaded in the SEBI appointment case

Mumbai based advocate had filed a petition requesting the SC to include him in the SEBI chairman’s appointment case as he wants to highlight the regulator’s alleged failure in addressing insider trading matters

In an interesting twist to the writ filed by S Krishnaswamy (former Chief of the Indian Air Force) and other eminent citizens, a Mumbai based advocate has filed an intervention petition seeking to implead himself in the case (writ no 392 of 2011). The writ alleges that the finance ministry has changed the composition of the search-cum-selection committee for appointment of the chairman and whole time members of the Securities & Exchange Board of India (SEBI) in order to be able to influence the selection process. The writ also questions a decision to drop a proposal to extend the term of ex-Chairman CB Bhave and the two members from three years to five years.

Interestingly, Advocate Debashish Nath, who practices in the Mumbai High Court wants to intervene, allegedly to highlight how SEBI does not act against ‘insider trading’ by certain corporate houses – specifically, India’s biggest private sector company Reliance Industries Ltd (RIL). SEBI has been conducting an investigation into the alleged insider trading by Reliance Industries and from time to time there have been media reports suggesting that the company may file consent proceedings and end up paying the biggest ever payment under SEBI’s settlement terms.
The advocate has attached correspondence under the Right to Information (RTI) Act that he had filed to seek information on insider trading. He says that SEBI had rejected his request for information and also dismissed an appeal filed against the decision.
The impleadment application goes back to the year 2000 when S Gurumurthy, had complained to SEBI about insider trading and a preferential issue by Reliance (prior to the division of assets between the Ambani brothers). The application then fast-forwards to 2011 and the letters written by Dr KM Abraham alleging that the incumbent SEBI chief UK Sinha was under pressure from the finance minister to go easy on investigation into specific corporate houses.

Adv Nath refers to a news report in The Economic Times dated 16 October 2010 which reported that Reliance made a profit of Rs500 crore through the sale of 18.04 crore Reliance Petroleum shares in November 2007. He goes on to point out that, the SEBI act provides for criminal prosecution and a fine of Rs25 crore going up to three times the illegal profit earned from insider trades.

He then cites the insider trading action against Raj Rajarathnam who was tried and sentence to a prison term and fine for insider trading. Adv Nath’s claim for impleading himself in the writ petition is the allegation that the present SEBI chairman UK Sinha is protecting corporate houses, by not discharging his duties and is protecting “corporate houses” who indulged in insider trading.

It remains to be seen if the Supreme Court is willing to entertain this intervention petition and allow Nath to be party to the case. Nath was not immediately available for comments.



Nagesh Kini FCA

5 years ago

It is hard to understand why SEBI always chooses the soft option of 'settlements' when it is empowered to levy heavier penalties.
The US penalties of long internment and fines running into millions of $ for Rajrathanam, Ponzi and Ponzi and other accuseds are the only remedy however high the culprits may be. Here the the 'bigger' the person lower are the punitives.
It is high time the watch dog bares its teeth instead of merely growling. Sooner the better.

Dr Vaibhav G Dhoka

5 years ago

The SEBI appointment case should converted to SCRAP SEBI litigation.The ordinary investor is fed up for ongoing DAILY scams at SEBI.

NSE to launch F&O in CNX PSE, CNX Infra from 25th November

Trading in CNX Public Sector Enterprises and CNX Infra futures and options would commence on the exchange from 25th November, the National Stock Exchange said in a circular

Mumbai: The National Stock Exchange (NSE) has said it will launch futures and options (F&O) on two sectoral indices—CNX PSE and CNX Infra—from next week, reports PTI.

Trading in CNX Public Sector Enterprises (PSE) and CNX Infra futures and options would commence on the exchange from 25th November.

The move would give investors an opportunity to invest in derivative products based on stocks of infra companies, a sector on which a lot of emphasis is being given by the government as well.

“NSE has decided to launch futures and options on two important sectoral indices .... CNX PSE and CNX Infra from the 25th November,” it said in a circular.

The decision has been taken after approval from market regulator Securities and Exchange Board of India (SEBI) to launch derivatives on these indices. The other two sectoral indices on which futures and options contracts are available currently include CNX IT and Bank Nifty.

The CNX Infra contracts, includes companies belonging to telecom, power, port, air, roads, railways, shipping and other utility services providers. CNX Infra is a 25-stock index, while Public Sector Enterprises (PSE) comprises 20 stocks.


Share prices headed lower: Tuesday Closing Report

The market indices broke all recent supports today. Any rally will be met by selling

A clutch of weak corporate earnings and the persistent European debt issues led the market lower for the fourth day in a row. While trying to hold on to yesterday’s close throughout the morning session, the Nifty had a free-fall in the post noon session. The index hit a 14-day intraday low today (including today) and closed in the negative. The indicators show the fall to continue. However, if today’s low holds, the index may see a bounce back to 5,125-5145 at the fresh selling will emerge, or else the fall may continue to reach till 5,020. The National Stock Exchange witnessed a volume of 61.61 crore shares.  

Extending its decline into the fourth day, the market opened weak on subdued corporate earnings reports and weak global cues as a surge in Eurozone bond yields stoked fresh concerns that a resolution to debt crisis plaguing the continent is yet to be worked out. The Nifty opened at 5,131, down 17 points from its previous close, and the Sensex declined 37 points to start the day at 17,082. Realty, banking auto and IT sectors were under pressure in early trade.

The indices hit their intraday high in the first hour with the Nifty touching 5,159 and the Sensex going up to 17,172. The market soon entered the negative territory as higher levels led to profit booking.

Trading in a narrow range, the market witnessed a high degree of volatility with the benchmarks hovering on both sides of the neutral line till the post-noon session. A sharp sell-off, which began around 1.45pm after the European indices opened lower, pushed all sectoral gauges into the red with the realty sector as the top loser.

The market fell to the day’s low towards the fag end of the session with the Nifty going down to 5,053 and the Sensex going below the 17,000 mark at 16,838. Closing slightly above those levels, the Nifty lost 80 points at 5,069 and the Sensex settled at 16,883, down 236 points.

The advance-decline ratio on the NSE was a dismal 226:1518.

The broader indices underperformed the Sensex today as the BSE Mid-cap index skidded 2.58% and the BSE Small-cap index plunged 2.77%.

All sectoral indices settled lower with the BSE Realty index (down 5.22%) emerging as the biggest loser. It was followed by BSE Capital Goods (down 2.77%); BSE Power (down 2.14%); BSE Bankex (down 2.02%) and BSE Consumer Durables (down 1.91%).

Cipla (up 6.51%); Tata Motors (up 1.91%) and HDFC Bank (up 0.23%) were the top performers on the Sensex. The top losers were DLF (down 6.66%); Jaiprakash Associates (down 5.84%); Mahindra & Mahindra (down 3.97%); ICICI Bank (down 3.70%) and Larsen & Toubro (down 2.81%).

The major gainers on the Nifty were Cipla (up 6.30%); Tata Motors (up 2.14%) and Grasim Industries (up 0.30%). The losers were led by DLF (down 7.43%); JP Associates (down 6.89%); Reliance Communications (down 5.26%); Siemens (down 4.84%) and Axis Bank (down 4.24%).

Markets in Asia settled lower following a surge in Eurozone bond yields overnight, igniting fresh worries that the European debt crisis might spread to other nations in the continent. A remark by German finance minister Wolfgang Schaeuble that Europe’s permanent bailout fund may not come into force before 2013 also added to the woes.

The Hang Seng declined 1.82%; the Jakarta Composite fell 0.50%; the KLSE Composite shed 0.11%; the Nikkei 225 slipped 0.72%; the Straits Times was down 0.66%; the Seoul Composite fell 0.88% and the Taiwan Weighted settled 0.46% lower. Bucking the trend, the Shanghai Composite added 0.04%.

Back home, foreign institutional investors were net buyers of stocks totalling Rs321.62 crore on Monday. On the other hand, domestic institutional investors were net sellers of equities aggregating Rs9.30 crore.

Promoters of FMCG major Dabur India, the Burman family, has formed a joint venture with global investment banking firm Espirito Santo Investment Bank (ESIB) for equity research brokerage businesses in India. ESIB said in a statement that the new joint venture—Espirito Santo Securities—will be its subsidiary. The stock declined 3.05% to close at Rs96.90 on the NSE today.

State-run exploration giant ONGC plans to spend Rs2,200 crore in phases for increasing output from its ageing oilfields located in Ankleshwar and Gandhar in Gujarat. These oilfields account for 25% of total onshore production of the country. The stock fell 0.90% to settle at Rs258.85 on the NSE.

Strides Arcolab’s US subsidiary Onco Therapies has received approval from the USFDA for marketing a generic carboplatin injection for the treatment of ovarian cancer. The approval is for carboplatin injections in strengths of 10 mg/ml, packaged in 50 mg/5 ml, 150 mg/15 ml, 450 mg/45 ml and 600 mg/60 ml multi-dose vials. Strides gained 0.82% to close at Rs416 in the NSE.


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