As the debate over the right to privacy in the case of phone tapping hots up, it seems that the stock market regulator is not easily given access to phone data
In the recent 2G spectrum allocation scam surrounding the former telecom minister A Raja, some journalists and corporate lobbyists are now also under the scanner. Their alleged involvement in this matter has been revealed in phone conversations with lobbyist Niira Radia, whose phone was under surveillance by the income-tax department through 2008 and 2009.
But the question that arises now is, how many and which are the government investigative departments that are allowed to tap phone calls for an investigation? Because, whenever the Securities and Exchange Board of India (SEBI), the stock market regulator, has tried to employ its sleuths to tap phones, it has found itself at the receiving end of the stick.
This matter is regulated under the Indian Telegraph Act (1885), an antiquated piece of legislation that has been subsequently modified by various governments. The Department of Telecommunications (DoT) has a list of government agencies and regulators who can seek data through this means and the circumstances under which the data can be demanded are described in the Indian Telegraph Act.
However, it is appears strange that SEBI is not among the agencies allowed to use this means. DoT has said in a letter, dated 10 December 2009 (a copy of which is available with Moneylife), that SEBI is not an authorised enforcement agency for intercepting or monitoring calls.
Call data records are often demanded by enforcement agencies for the purpose of investigations. Of course, such interception of telephonic communication should be reasonable without breaching the right to privacy.
It seems that demanding telecom data has become a regular practise by the regulators, particularly SEBI. Moneylife has learned that the stock market regulator, although not authorised to receive such data, seeks phone call records time and again. SEBI had earlier approached the Ministry of Finance and other relevant government ministries seeking to be included as a designated monitoring agency. But the ministry rejected its plea.
The Income-tax department, which is an authorised agency and can seek call records data, is required to take the permission of the Director General of Income-Tax (Investigation) before seeking the interception of phone calls. Whereas, SEBI officials have been try to get data without even taking the approval of the SEBI board for this purpose. In many cases there have been demands for such information on phone calls even before an investigation has been initiated.
It would be relevant to mention the infamous Pyramid Saimira Theatre Limited case, where SEBI's investigative team used phone call data as part of its investigations to crack the case.
The case involved a manager in SEBI's investigation department, J D'Souza, who allegedly forged a letter to the company's chairman, asking him to make an open offer within 14 days. Nirmal Kotecha, a co-promoter, planted a report about the SEBI order in a couple of newspapers, causing the share price to shoot up. This followed the decision of the chairman, PS Saminathan to acquire the 25% stake held by the two co-promoters.
When the price flared up, many people, including Mr Kotecha, made a killing. The case was solved through detection of the phone records of which revealed the repeated conversations of Mr Kotecha with many of the people involved. Moneylife has repeatedly reported on this case.
Moneylife tried to contact SEBI officials for their reaction through e-mail and SMS, but received no response.
Is such an investigation enough grounds to seek phone records that may breach the right to privacy of an individual? In the current Niira Radia tapes episode, is there something called 'public interest' that should get importance over the right to privacy. There is a thin line between the right to privacy and national interest that needs to be addressed.
New Delhi: In an effort to make prices uniform for consumers, the oil ministry has asked the Planning Commission to set up a committee to suggest a mechanism for averaging out price of costlier imported LNG with cheaper domestic gas, reports PTI.
"We have suggested to the Planning Commission that a committee be formed on 'Pooled Pricing' of gas," oil secretary S Sundareshan said at a Federation of Indian Chambers of Commerce and Industry (FICCI) conference here.
He said the panel may be headed by advisor (energy), Planning Commission and may include chairman, Gail (India) Ltd; managing director and CEO, Petronet LNG Ltd; secretary, Petroleum and Natural Gas Regulatory Board (PNGRB) and director finance, Oil and Natural Gas Corporation (ONGC).
A pooled price or averaging out of difference rates, for natural gas may be necessary in view of the limited domestic gas availability and increasing reliance on imported liquefied natural gas (LNG) to feed the demand.
The oil ministry had earlier commissioned a study by Spanish consultant Mercados International on the feasibility of pooling of over a dozen different rates at which natural gas produced from different fields in the country is sold.
The price for domestic natural gas ranges from $2.71 to $5.73 per million British thermal unit (mmBtu), while LNG on long term contract is currently imported at $6.92 per mmBtu and from spot market at close to $8.52 per mmBtu.
Mercados has suggested separate pools for fertiliser and power sector and involved several complex inter-ministerial issues.
Mr Sundareshan said the Planning Commission has been requesting an inter-ministerial committee under the chairmanship of its advisor (energy), to formulate a policy for pooling of natural gas prices and devise pool operating guidelines to make the policy operational.
Others in the committee could be representatives of the ministry of petroleum and natural gas, power, fertiliser and finance at the level of the additional secretary.
The need for pooling of domestic gas price with imported LNG has arisen because LNG from Australia will cost almost $14 per mmBtu when it lands at Kochi in Kerala in 2014.
"It will be unreasonable to expect consumers to pay (such a price)," Mr Sundareshan said.
Petronet LNG Ltd, India's largest importer of liquefied natural gas, has contracted 1.5 million tonnes a year of LNG from Australia for delivery at its under-construction Kochi terminal in Kerala from end 2014.
The natural gas produced by state-owned ONGC and Reliance Industries, which together account for over 80% of gas in the country, is priced at $4.2 per mmBtu.
The modalities of pooling will be worked out in 6-8 months, he added.
Mumbai: The Reserve Bank of India (RBI) today cautioned people against money schemes offering assured high returns and asked them not to have deposits with unauthorised non-banking finance companies (NBFCs) that falsely claim to have approval from the central bank to conduct business, reports PTI.
It said all complaints on unauthorised acceptance and running of money circulation schemes should be referred to the economic offences wing of the concerned state governments.
"It was reported that some individuals, firms, unincorporated association of individuals (unincorporated bodies) or marketing companies and companies engaged in money circulation schemes have been collecting money from the public by making tall promises of high returns, either through issue of advertisements or by sale of products," the RBI said.
It said in a statement that many such entities have vanished without repaying the money collected by them.
"Money circulation schemes are banned under the Prize Chit and Money Circulation Schemes (Banning) Act, 1978 and the respective state governments have the power to take action against the persons involved in such schemes," RBI said.
The central bank has already published a list of over 300 NBFCs across the country which can accept deposits.
"No NBFC outside of this list can accept deposits from public. Doing so is clearly fraudulent and has to be investigated by the law enforcement agencies in the normal course," the RBI said.
The apex bank has been issuing advertisement from time to time cautioning the public about such fraudulent practices, it added.
NBFCs are also in the same operations as banks, although with some differences. Unlike banks, NBFCs cannot accept demand deposits or issue cheques.