The scandalous ganging up of some SEBI members to protect CB Bhave and NSDL was reported extensively only in Moneylife and conveniently glossed over by the mainline media. SEBI's decision to release orders from the Mohan Gopal report to NSDL for compliance, just vindicates the stand taken by us
The Securities and Exchange Board of India (SEBI), which had last year given a clean chit to the National Securities Depository Ltd (NSDL) in the IPO scam of 2003-06, has now re-opened this case vindicating the stand taken by Moneylife.
The market regulator announced last evening that following the orders by the Supreme Court, it has been decided to release the orders of the two-member Mohan Gopal Committee, in the matter of the IPO irregularities and DSQ Software case to NSDL for compliance.
Speaking to journalists after a meeting of the SEBI board, chairman UK Sinha said that the regulator has decided to implement the committee report on the role of the NSDL in the scam.
The committee, comprising the then SEBI board members G Mohan Gopal and V Leeladhar, was constituted in 2008 to look into NSDL's role in the IPO scam and it found various lapses on the part of the depository, as well as SEBI itself.
Moneylife has been the only publication to point out that the spate of eulogies by the mainline media about CB Bhave’s tenure as chairman of SEBI (like “best SEBI chairman” and “the best three years of SEBI ever”) were motivated and highly misplaced.
Moneylife has long pointed out how the government had erred in appointing CB Bhave as chairman when there was this pending matter between SEBI and the NSDL, which Mr Bhave himself founded and headed for over a decade. The SEBI action against NSDL was based on an independent inspection ordered by the regulator into the systems, processes and multiple IPO applications scam that went unnoticed by both depositories, indicating serious flaws in their operations.
The finance ministry came up with a dubious strategy to “ring-fence” Mr Bhave as SEBI chairman from the NSDL-SEBI litigation, by appointing a two-member bench of the SEBI board to investigate the allegations afresh. It comprised Dr Mohan Gopal, who headed the National Judicial Academy and Reserve Bank of India’s former deputy governor V Leeladhar.
However, it was soon clear that the ‘ring-fence’ was a sham and SEBI moved rapidly to eliminate all traces of the IPO scam, clearing NSDL and exonerating Mr Bhave. Almost everyone accused was cleared through consent orders. The most outrageous was the one-line order closing the case against CDSL, with no attempt to ensure that it has cleaned up its act.
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