Special leave petition in Supreme Court revives the matter of the controversial role of the SEBI board in exonerating CB Bhave’s role as NSDL chief in the IPO scam in 2006
After a publicity blitz hailing Chandrashekar B Bhave as the messiah of retail investors (not by Moneylife) and the best chairman of the Securities and Exchange Board of India (SEBI) we learn that the Supreme Court is asking questions about a big blot on SEBI's credibility, which large sections of the media chose to bury.
Hearing a special leave petition (SLP) 2801 of 2011, against a Delhi High Court order, a bench comprising Justice R V Raveendran and Justice A K Patnaik has asked SEBI to respond within two weeks, as to why the report of the Mohan Gopal-V Leeladhar Committee (comprising SEBI board members), in connection with the 2006 multiple-applications to IPO (initial public offerings) scam, was rejected outright.
Readers of Moneylife would recollect that although chairman CB Bhave had recused himself from issues related to the IPO scam, the entire board, led by whole-time directors appointed by him, had worked hard to ensure that every trace of the IPO scam, especially the indictment of the National Securities Depository Limited (NSDL) when Mr Bhave was its chairman, was expunged and erased (the Central Depository Services of India was a beneficiary of this protection to NSDL and also got away scot free). The orders of the committee were declared void based on an opinion of C Achutyan, former presiding officer of SAT.
(Read: The Curious Case of Suppressed Orders; What will SEBI decide today?; Sacrificing SEBI’s credibility to save NSDL; Reining in the Regulator )
According to a report in the Indian Express, the Supreme Court openly wondered why the report of a bench of the SEBI board was sidelined and ignored. The court was hearing an SLP filed by an NGO called the Social Action Forum For Manav Adhikar which has alleged that Mr Bhave showed "undue favours" to NSDL in the IPO 2006 scam issue. It has advocate Prashant Bhushan as its counsel. (Incidentally, a petition filed by the NGO before the Delhi High Court was dismissed and a cost of Rs50,000 imposed on it for unnecessary litigation.)
Yet, it is interesting to look at the questions of law raised by the petition, since it can have a big impact on the perception about how SEBI has functioned in the past three years under Mr Bhave's chairmanship. The SLP asks:
The petition further states that the Delhi High Court, "failed to appreciate that the SEBI board, may, without any legal authority, in an arbtirary and mala fide manner, usurp the powers of judicial review of quasi-judicial orders, which, under the SEBI Act, are subject only to review by SAT and the Supreme Court and High Courts under Articles 32, 226/227 respectively". And whether actions taken by SEBI in the exercise of judicial power were, in the words of Justice J S Verma (former chief justice of the Supreme Court) "a violation of established legal and constitutional principles".
The NGO requested the Supreme Court to direct SEBI to implement the orders issued by the committee and "order an investigation by an appropriate agency regarding various acts committed by CB Bhave in his capacity as chairman of SEBI so as to do undue favours to NSDL."
Now that the matter is in the Supreme Court, it will be interesting to see if the issue is buried once again. One thing, however, is clear-the main dramatis personae are no longer as powerful as they were under a chairman who was personally involved. Interestingly, Mr Bhave had once told this writer that SEBI has been and remains a chairman-led organisation. This was not clearly visible in its actions, when the chairman was ostensibly "ring-fenced" from the IPO scam-related issues.
(Read the complete orders of the SEBI board: http://www.sebi.gov.in/cmorder/NSDL-IPO.pdf and http://www.sebi.gov.in/cmorder/DSQSoftware.pdf)
Improving manufacturing indices in the US and the EU has led to the increased demand; worldwide production up 5.3% to 119 million metric tonnes in January compared with 113 million metric tonnes during the same month of the previous year
World crude steel production spiked 5.3% to 119 million metric tonnes (MMT) in January compared with 113MMT during the same month of the previous year on the back of growing demand from developed countries.
"Generally, the first quarter of a calendar year is seen as strong from the demand point of view. Now, we are seeing growing demand from developed economies such as the US and European countries, and that is leading to an increase in production activities," Alok Kumar Nemani, an analyst with Nomura Financial Advisory and Securities (India) Pvt Limited, told Moneylife.
Manufacturing activity in the US, Europe and China has been moving northwards. According to the Institute for Supply Management (ISM), the index of manufacturing activity in the US rose to 60.8 in January, from 58.5 in December. The Market PMI for the eurozone rose to 57.3 in the last month, from 57.1 in December 2010. The HSBC China Manufacturing PMI edged up to 54.5 in January, from 54.4 in December 2010.
According to data published by the World Steel Association (worldsteel), crude steel production in the US rose 9.4% to 6.8MMT in January compared with January 2010.
Worldsteel members produce around 85% of the world's steel. The EU has reported an increase of 4% to 14.2MMT in January, compared with the year-earlier month, added the worldsteel statement. Germany's crude steel production for January 2011 was 3.7MMT, an increase of 4.4% compared to January 2010.
Turkey produced 2.7MMT of crude steel in January 2011, a 33.4% increase over the same month in 2010.
"In Europe, demand for the automobile & engineering sectors looks firm in 2011 while the construction sector may remain weak this year," Karl-Ulrich Kohler, managing director and chief executive officer of Tata Steel (Europe) had said earlier this month.
In January, the world crude steel capacity utilisation ratio was 75.6 % from 73.3% in December 2010. However, the utilisation ratio was 0.4 percentage points lower than January 2010.
Maintaining the current production rate, the world largest steel producer and consumer, China, produced 52.80MMT in January, which is just 0.5% higher than January 2010.
"China's growth was flat in January. Now Chinese steelmakers will gear up for production as their new year and holidays are over," added Mr Nemani.
China's Ministry of Industry and Information Technology (MIIT), in its statement said, "The country is expected to produce 660 million tonnes of crude steel this year from 626.70 million tonnes last year on the back of surging demand from construction, machinery, home appliances and shipbuilding."
However, the China Iron and Steel Association reported that the country's daily crude steel production has dropped 5.4% to 1.695 million tonnes in the second 10 days of January, from the previous 10 days, due to regular equipment repairs and occasional production incidents at mills.
India is the world's fifth largest steel producer. The country's crude steel production in January went slightly down by 0.6% to 5.60MMT, compared with January 2010.
"Production growth has not changed in the last month. Ideally, it should pick up momentum in February and March, as government projects get completed, and they have to meet targets," added Mr Nemani.
Other Asian countries-like Japan and South Korea-have recorded an impressive growth in production. Japan produced 9.7MMT of crude steel in January 2011, up 10.7% compared to the same month last year. South Korea showed an increase of 24.2% from January 2010, producing 5.60MMT of crude steel in January 2011.
D Swarup was chairman of the Pension Fund Regulatory and Development Authority (PFRDA) till last year
The Financial Planning Standards Board India (FPSB India) today announced the nomination of Dhirendra Swarup as its new chairman.
Mr Swarup was chairman of the Pension Fund Regulatory and Development Authority (PFRDA) till last year.
He has behind him an illustrious career as a civil servant and retired as the Secretary (Expenditure & Budget) in the Union Ministry of Finance, a release said here.
"The Indian financial services industry is due for a major introspection, which is necessary pursuant to recent initiatives by various regulators to bring an element of advice in selling of financial products," Mr Swarup said.
"FPSB India, backed by the commitment of 50 leading financial brands and the support of all stakeholders, will strive to bring the benefits of informed investment decision-making closer to investors in India," he said.