The judgement has dealt a rare stinging blow to several powerful reputations. The SC also called the petitioner a 'stool pigeon'

On 3rd November, the Supreme Court (SC) rejected a third public interest litigation (PIL) against the appointment of UK Sinha as chairman of the Securities & Exchange Board of India (SEBI). The 87-page judgement termed the petition ‘motivated’ and felt that the petitioner was a ‘stool pigeon’ of ‘surrogate phantom lobbies’. The judgement has dealt a rare stinging blow to several powerful reputations with this observation: “This is not a petition to protect the fundamental rights of any class of downtrodden or deprived section of the population. It is more for the protection of the vested interests of some unidentified business lobbies.”

On two previous occasions in 2011, similar PILs were filed by a very eminent troika of persons namely, former air chief marshal S Krishnaswamy, India’s ‘super cop’ Julio Rebeiro, and former joint director of the central bureau of investigation (CBI) BR Lall. They were represented by Gopal Subramaniam, the former solicitor general of India. In November 2011, I had described these petitions ‘bizarre’ and wondered why these persons, who had shown no interest in the many major problems with India’s capital market regulation, would go to the apex court with a petition making ‘unfounded’ allegations against the then finance minister. The then chief justice, SH Kapadia, had called it a ‘publicity-seeking petition’ and allowed it to be withdrawn twice. This time, a very combative petitioner was represented by Prashant Bhushan, a reputed advocate and now a senior leader of the Aam Aadmi Party who is known to take up public causes.

Assuming that all these activists are concerned about establishing a fair process to select the chairman of SEBI, the question is: How come none of them found anything objectionable in the appointment of UK Sinha’s predecessor CB Bhave? He was not on the final short-list and was hobbled through his tenure by an artificial ‘ring fence’ in connection with SEBI’s indictment of the role of National Securities Depository Limited (which he founded and headed for 15 years) in the IPO scam of 2006. The activists also found nothing wrong in the surreptitious attempt to grant an extension to Mr Bhave and his chosen core team of whole-time directors and executive directors, whose term ran almost concurrently, just a year after their appointment.

But time has a funny way of dealing with issues. Among those against UK Sinha’s appointment, was SEBI’s former whole-time director, KM Abraham. In a letter to the prime minister (PM),

Mr Abraham had alleged that Mr Sinha would bury the Sahara case at the behest of then finance minister Pranab Mukherjee. The Supreme Court has been dismissive of these letters. Mr Abraham has been proved completely wrong on the Sahara issue. (He was also part of the cabal of top SEBI officials close to the previous chairman who considered Jignesh Shah unfit to run an equity exchange. Mr Shah may have proved them right but the fact is that the same prescient team had found Mr Shah fit to start a currency derivatives segment). The apex court pointed out that Mr Abraham’s complaint was ‘motivated’, that it “did not espouse any public interest” and was made only after his extension at SEBI was denied, seemingly out of personal pique.