Regulations
SAT has a hard rap for SEBI's Whole Time Member, Asks another WTM to decide case
The Securities Appellate Tribunal (SAT) delivered a hard and embarrassing rap to a Whole Time Member (WTM) of the Securities and Exchange Board of India (SEBI) for its apathy and giving a run around to the appellant. SEBI has been also directed to pay Rs1 lakh as cost to the appellant. Although the SAT order does not mention the WTM's name, it is clear that the order was that of Rajeev Kumar Agarwal. He is one of the two WTMs at SEBI. "This appeal reveals the shoddy manner in which the directions of this Tribunal are dealt with by the WTM of SEBI," the Bench said says the order.
 
In its order on 15 July 2016, the SAT Bench of Justice JP Devadhar, Jog Singh and Dr CKG Nair said, “If for any administrative constraints it was not possible to pass an order within the stipulated time, then the WTM of SEBI ought to have sought extension of time, which the WTM of SEBI has failed to do. Instead, the WTM of SEBI resorted to a totally impermissible mode of representing that an order has been passed when in fact no order was passed by him. In such a case, informing the party that an order disposing of the representation is already passed, without actually passing an order, is nothing but an attempt to mislead in the matter. We strongly condemn the irresponsible approach adopted in the matter”. 
 
Kolkata-based Adventz Finance Pvt Ltd had filed a fresh appeal before the SAT, after being made to run around by SEBI and for not following directions from the Tribunal. 
 
Earlier on 6 May 2016, the SAT had asked SEBI to hear representations of Adventz Finance and dispose the matter within seven weeks or by 24 June 2016. On 21 June 2016, the WTM gave an opportunity to Adventz Finance to be heard, but did not pass any order, as directed by the SAT.
 
When the matter came up for hearing on 7 July 2016, the counsel for SEBI orally requested an extension of time to pass an order, which was rejected by the SAT. The Tribunal then asked the appeal to be placed for admission on 12 July 2016.
 
During the hearing on 12th July, the counsel for SEBI submitted a letter dated 8 July 2016 and told the Bench that "the said letter contains the reasons on the basis of which the competent authority viz the WTM of SEBI has rejected the representation of the appellant."
 
On perusal of the letter, SAT found that it was not an order passed by the WTM of SEBI but only a communication issued by the Chief General Manager (CGM) of SEBI recording the gist of the order allegedly passed by the WTM. To allow SEBI to submit copy of order passed by the WTM, SAT adjourned the matter and posted it after lunch on the same. When no copy of the order was submitted, the SAT adjourned the matter to 13 July 2016.
 
On 13th July, the counsel of SEBI told the SAT that there is no order passed by the WTM of SEBI. The counsel for SEBI submitted that the letter dated 8 July 2016 was issued by the CGM based on the endorsement made by the WTM of SEBI on the office note put up by a junior officer (AM) of SEBI on 23 June 2016. The SAT then adjourned the matter to 15th July.
 
During the hearing on 15th July, the counsel for the market regulator submitted an affidavit filed by the CGM of SEBI. In the affidavit, the CGM stated, "...the WTM had instructed that a note be prepared and accordingly, a note was prepared and put up for approval of WTM on 23 June 2016. Along with the said note, draft letters to be sent out to the appellant were also placed before the WTM of SEBI. The note, as also draft letters, was approved by the WTM on 27 June 2016 and, accordingly, letter dated 8 July 2016 was issued to the appellant, thereby communicating the decision of the WTM of SEBI disposing off the representation of the appellant."
 
When asked by the SAT, the counsel for SEBI admitted that there was no order passed by the WTM in this matter. The Bench said, "Thus, it is evident that the WTM of SEBI permitted the Chief General Manager to issue a letter to the appellant that the representation made by the appellant has already been disposed off by the WTM of SEBI, when in fact no order was passed by the WTM of SEBI. Since the WTM of SEBI has not passed any order, we would have directed the WTM of SEBI who had heard the appellant on 21 June 2016 to pass an order immediately.  However, we are informed that the said WTM of SEBI is travelling."
 
"In these circumstances, we quash the letter issued by the CGM on 8 July 2016 and direct SEBI to assign the matter to any other responsible WTM of SEBI who shall pass an order on the representation of the appellant within two weeks from today after giving an opportunity of hearing to the appellant. It would be open for such WTM of SEBI to hear the representation of the appellant as also the representation made by the Respondent No2 (Jai Annanya Investments Pvt Ltd) together and pass appropriate order," the SAT says.    
 
The Tribunal further said, "Since we are distressed with the manner in which the WTM of SEBI has discharged his quasi-judicial duties which is highly detrimental to the interests of the securities market, we direct the registry to forward a copy of this order to the Finance Minister and also to the Chairman of SEBI for information."
 
The order seems to suggest that SEBI's senior most officials are operating without understanding the responsibility and gravity of their role as regulatory body and a quasi-judicial authority.  It is surely a matter that needs the attention of the finance minister, the law ministry and the judiciary.
 

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COMMENTS

R Balakrishnan

7 months ago

When someone with power becomes an extortionist, justice is denied. Clearly SEBI being stuffed with people from ED or Tax or some other govt service is a recipe for unfairness and possible extortion. Apart from political motivation, personal graft also comes to the fore..

Samuel C S

7 months ago

SEBI is the most powerful regulatory agency in the country and the least accountable of all. The Chairman n Members are so audacious that they do not believe in rule of law. CBI, CVC and Finance Ministry are all hands in gloves with U K Sinha.

Vaibhav Dhoka

7 months ago

The affairs at SEBI are very shoddy.What action Finance ministry will take on such senior officers?SEBI has done more harm to market than any other authority.
JULY 12

WPI inflation accelerates, but profit margins getting squeezed
India's wholesale price index (WPI)-based inflation rose to a higher-than-expected 1.6% in June from 0.8% in May entirely driven by food prices. This data from June also reflect weak pricing power of corporates, says Nomura in a report.
 
The research note says, "Despite rising input costs, manufacturers did not implement commensurate increases of output prices, which reflects increased pressure on profit margins."
 
Sequentially, prices of several manufactured categories such as machine tools, leather and wood products fell, while textiles rose marginally, reflecting weak pricing power amid the slow domestic recovery and weak external demand. Global deflationary forces (in basic metals, metallic mineral products) added to the downward pressures. However, with waning base effects, core WPI deflation eased to -0.3% y-o-y in June from -0.5% in May. 
 
 
"Indeed, a breakdown of the WPI into input and output prices shows that input costs picked up sharply, rising 1.5% y-o-y (vs 0.3%), but output price inflation was unchanged at 1.6% y-o-y. This suggests that firm profit margins will likely come under pressure as they are absorbing much of the higher input costs," Nomura added.
 
During June, the core WPI deflation (WPI manufactured ex-food) eased, in line with expectations. Core WPI deflation eased to -0.3% y-o-y in June from -0.8% y-o-y in May. However, sequentially, prices of several manufactured categories fell or were muted. 
 
WPI food price inflation (primary and manufactured) rose further to 8.2% y-o-y in June from 7.8% in May. Sequentially, the pace of pick-up in vegetables (17.1% m-o-m), cereal (1.9%) and edible oil (1.2%) prices accelerated. "Food inflation has doubled over the span of four months, contributing significantly to the rise in WPI. Although food prices typically rise in summer months, the pick-up this June was much higher than normal, at 2.3% m-o-m average over the last three years," the report pointed out.
 
 
Non-food primary products such as fibre and mineral prices rose amid higher global prices. Fuel price deflation also eased to -3.6% y-o-y from -6.1% in May, as prices of almost all market-linked fuels like petrol, diesel, aviation fuel, naptha and furnace oil, picked up sequentially, reflecting the lagged pass-through of higher global fuel prices.
 
"Looking ahead, we expect year-on-year WPI inflation to continue rising because of waning base effects, albeit at a muted pace given ample manufacturing spare capacity and the recent stabilisation of global commodity prices. For the full year, we expect WPI inflation to average 0.6% y-o-y in 2016, up from -2.7% in 2015," Nomura concluded.
 

User

When Aadhaar was about to make me 'Niradhaar'
I have been hearing about problems of identifying a person through the Aadhaar number system. However, my touching faith in the integrity and capability of India's information technology (IT) professionals made me believe that the technological solution must be very sound and the errors if any would be negligible. 
 
My friends Aruna Roy and Nikhil Dey had told me that workers who work with their hands have their thumbs getting worn out and hence being deprived of their legitimate rations, pensions and other entitlements. I had again believed that these might be rare occurrences, which were being anecdotally described. I have been aware that Sucheta Dalal and Debashis Basu at Moneylife have also been highlighting serious concerns on Aadhaar. I trust and have great faith in all these friends but felt that they were perhaps picking holes in one of the greatest technological feat of India for small discrepancies.
 
However, a few days ago, my personal experience altered my perception, and I think there may be serious flaws, which are being wished away. I have taken my Aadhaar number in the last three years, and have only shown it or quoted the number sometimes. I do not wash clothes or do manual work, which could lead to my fingerprints changing. 
 
My bank,-HDFC Bank- said I must get my know-your-customer (KYC) documentation re-done. They said my Aadhaar number would serve the purpose. I gave them my Aadhaar number and they asked me to put my thumb on a small device. I could see my thumb impression on a screen. However, the system refused to validate me! 
 
The bank employee asked me to try again and we did this over six times with the same result. The bank employee told me that this happens very frequently with many customers. Most of these customers would not be working with their hands, and yet the system of Aadhaar verification was not working. 
 
I could do my KYC by giving other documents, but the horror of this hit me. If the system cannot recognise people from its database with the thumb impression, what would happen to those whose foodgrains, pension or employment guarantee scheme (EGS) wages depend on it?  
 
I think there is an urgent need to check over a large sample of maybe 10,000 people in different places to validate whether the system does what is claimed. Otherwise, we will only have a pretension of having a system to identify every individual in the country. It is necessary that the truth be revealed by actual verification of a large sample across different parts of the nation. 
 
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User

COMMENTS

Anupam Naik

7 months ago

I have similar experience twice when in my case Aadhar biometrics failed. While renting my place the leave & license agreement could not be signed by me as the machine refused to accept my signature and I had to manage with the power of attorney. Also when we wanted to take a flat on rent, this happened again.

What is to be done? Are we supposed to give hand print periodically and if it is so, where?

At present for me it is just like PAN, nothing less or nothing more. Wherever and whenever biometrics tests for Aadhar will be done, I am sure to fail.

I do not have to work with the hand like manual labour but they say with the advancing age this can happen. For the time being until a solution emerges, God only knows.

Param

7 months ago

i have been asked multiple times why i don't have aadhar card. my reply is very simple - it was meant to track subsidies & i'm not availing any subsidy, then why is it mandated for me? every time i stuck to my stand, they came up with some other workaround to get the job done. i wonder how long i can sustain!!!

Sudhir Singh

7 months ago

Every new technology or system has its own challenges. If there are weakness in Adhaar system they need to be removed and system made stronger. However, the application and is is in our national interest. Biometric is not limited to finger print only. Giants like Apple and Google will be using their technology soon to authenticate users by biometric. The choice soon will be whose system we use, our own home grown or become a colony of US companies. The globe is going to be digital soon. We do not have a choice to be left out of it. We have only one choice, to make our systems stronger and protect our people using technology.

Suresh Joshi

7 months ago

In the year 2011 i was enrolled however thru an oversight instead of male gender they have enrolled me as a Female.On return i found this mistake and rushed to the centre to correct this anomoly and accordingly the rectification was done and given the copy of the same.In the year 2013 i received the Aadhaar card without any correction.Then I contacted the UID by e-m and the correction sheet was filled and sent Hyderabad centre for correction but till today i have yet to receive the card.My Aadhaar no is no more valid.Their phone lines are not operating.What a person under the cicumstances can DO!!

Suresh Joshi

7 months ago

In the year 2011 i was enrolled however thru an oversight instead of male gender they have enrolled me as a Female.On return i found this mistake and rushed to the centre to correct this anomoly and accordingly the rectification was done and given the copy of the same.In the year 2013 i received the Aadhaar card without any correction.Then I contacted the UID by e-m and the correction sheet was filled and sent Hyderabad centre for correction but till today i have yet to receive the card.My Aadhaar no is no more valid.Their phone lines are not operating.What a person under the cicumstances can DO!!

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