FinMin challenges eminent citizen’s petition on SEBI appointments
Moneylife Digital Team 15 November 2011

The affidavit filed in the apex court says that Pranab Mukherjee tried to put in place a statutory search mechanism for the post of SEBI chairman and the whole time directors

In a hard-hitting affidavit, the Finance Ministry (FinMin) has challenged the assumptions and motivations of a group of the eminent citizens who have filed a writ petition in the Supreme Court over the appointment of the chairman of the Securities & Exchange Board of India (SEBI) and the whole time directors.

The affidavit filed by Amit Bansal, an under secretary in the Finance Ministry refutes two assumptions on the basis of which the ‘eminent citizens’ have sought to quash the appointment of UK Sinha as chairman and to extend the term of two whole time directors MS Sahoo and KM Abraham from three to five years (they have already quit SEBI ).

The petition makes two allegations. First, that the rules have "been altered and it is now possible for people with no expertise in the area to be handpicked at the whims and fancies of those empowered to do so under the amendment and this will impair the working of SEBI."

As has already been reported by various newspapers, the affidavit points out that the search committee in 2009 had mentioned four names. First M Damodaran who was already the SEBI chairman, UK Sinha and Jaimini Bhagwati (both former joint secretaries in charge of the capital markets portfolio at the Finance Ministry) and it mentioned that CB Bhave had mentioned that he was disinclined to accept the post. Yet, strangely enough, Mr Bhave was selected, when (as Moneylife has frequently reported) the Prime Minister was all set to grant an extension to Mr Damodaran.

The affidavit says that Finance Minister Pranab Mukherjee tried to put in place a statutory search mechanism for the post of SEBI chairman and the whole time directors.

The full affidavit of the finance ministry is as below:

1 decade ago
indian govt. pokes its nose in running everything except in governing sensibly! this trend was to have chnaged 30 yrs. ago, but hasnt a bit!

democracy is a bane in india. it needs chinese type of politics.
dayananda kamath k
1 decade ago
when his name is not there in panel names further it is very well known that role of nsdl is being probed by sebi then appointing him as sebi chairman shows that it is conspiracy to protect some vested interests. that has to be probed
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