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NSDL’s IPO case is a reminder that former SEBI chairman appointment was made under the most bizarre circumstances
The Securities and Exchange Board of India (SEBI) has challenged an order of the Securities Appellate Tribunal (SAT) letting off the National Securities Depository Limited (NSDL) for its role in the multiple-application scam of 2003-05 and more serious lapses in DSQ Software’s dubious increase in capital just after the dotcom bubble. This has happened soon after the third public interest litigation (PIL) questioning chairman UK Sinha’s appointment was thrown out by the Supreme Court (SC). On 19th November, India’s apex court has asked NSDL to file a response to SEBI’s challenge, giving a fresh life to the most bizarre, but hardly-reported, case in the 25-year life of India’s market watchdog.
CB Bhave shepherded the depository statute through Parliament as executive director at SEBI and went on to found NSDL and head it for the largest number of years in its existence. The depository grew rapidly and extended its operations into tax information and other areas, far beyond SEBI’s ambit.
NSDL’s aura of high efficiency was shattered after an income-tax investigation stumbled on a massive multiple-application scam which had gone unnoticed by the depository, even though the applicants brazenly consolidated thousands of allotments into a few depository accounts before the shares of a manipulated initial public offering (IPO) were listed.
It seemed astonishing that NSDL’s systems were unable to detect multiple applications. But what was scandalous is the saga after that. Under chairman M Damodaran, SEBI ordered an inquiry that indicted NSDL. The depository managed to raise a storm of outrage.
Soon after, Mr Bhave was appointed SEBI chairman, despite pending investigation and regulatory action. An artificial ring-fence was created around Mr Bhave to allow a fair investigation of the IPO scam to continue, but the signal from the finance ministry was clearly that NSDL was wrongly indicted.
In a strange twist, a two-member committee of the SEBI board again indicted NSDL and also discovered the DSQ episode. The report of 2008 lay buried for a year and was made public only when Dr Mohan Gopal, a member of the committee, went public after a PIL was filed in an Andhra Pradesh court.
Did this lead to action against NSDL? No. In fact, the SEBI board, in a bizarre decision, declared the orders of its own committee as void in February 2010! In the process, the board also ignored a legal opinion from none other than the late Justice JS Varma, an extremely respected former chief justice of the Supreme Court.
Finally, SEBI was asked to reconsider its order by the Supreme Court in July 2011. NSDL was then ordered to conduct an inquiry and fix responsibility for the lapses and it challenged the SEBI order before the SAT.
Meanwhile, the case dragged on; Mr Bhave’s term was not extended; this led to several PILs being filed against UK Sinha’s appointment which the apex court has recently called ‘motivated’. NSDL was also bifurcated, to set right issues with its regulation and supervision that Moneylife had pointed out.
Interestingly, in August 2013, SAT decided to quash SEBI’s order of 2008 (implemented only in 2011) saying that fixing individual responsibility at this belated stage was ‘unjustified and unreasonable’. SEBI has challenged the SAT dismissal, ensuring that the highest court in the country hears this sordid saga involving repeated perversion of power, motivated appointments to the SEBI chairman’s post and evasion of responsibility for the IPO scam.
The CBI court held both Rajesh and Nupur Talwar guilty for murdering their teen daughter Aarushi and their domestic help Hemraj at their home in May 2008
A Central Bureau of Investigation (CBI) court on Monday convicted dentist couple Rajesh and Nupur Talwar in the Aarushi-Hemraj double murder case.
According to lawyers, the dentist parents have been convicted of murder and destruction of evidence among other offences.
"We are deeply disappointed, hurt and anguished for being convicted for a crime that we have not committed. We refuse to fee defeated and will continue to fight for justice," the Talwar couple said in a statement issued after the verdict.
Nupur and Rajesh Talwar were found guilty of murdering their teen daughter Aarushi and their domestic help Hemraj at their home in May 2008.
Rajesh Talwar has also been convicted for filing a wrong first information report (FIR) with Noida police.
Tarun Tejpal, in his petition, has also sought transit bail to approach the appropriate court in Goa
Tarun Tejpal, the editor of Tehelka on Monday moved the Delhi High Court seeking anticipatory bail in a sexual assault case lodged against him in Goa.
Justice GS Sistani, before whom the petition was mentioned by senior advocates KTS Tulsi and Geeta Luthra, will hear the matter on Tuesday.
Tejpal, in his petition, filed through advocate Sandeep Kapur, has also sought transit bail to approach the appropriate court in Goa.
The alleged incident happened in a lift in a five-star hotel in Goa earlier this month.
The Goa police had on November 22 lodged an FIR against Tejpal under sections 376 (rape), 376 (2)(k) (rape by a person of a woman in his custody taking advantage of his official position) and 354 (outraging modesty) of IPC in connection with the incident.
Conviction under section 376 of IPC entails a maximum of life term in jail.
The issue came into the limelight when an email by the woman journalist of his magazine alleging sexual assault was made public and Tejpal announced on 19th November that he was 'recusing' from his job for six months.
Yesterday, a three-member Goa police team, which had arrived in Delhi on 23rd November, quizzed Tehelka managing editor Shoma Chaudhury and three employees who had been contacted by the alleged victim to corroborate her version.
The police also seized from the Tehelka office a hard disc, transcripts of emails exchanged among Tejpal, Choudhury and the girl and other documents.