Sun Pharma: SEBI Refuses To Disclose Information under RTI on Whistleblower Document and Action Taken 
Moneylife Digital Team 11 March 2019
Market regulator Securities and Exchange Board of India (SEBI) has turned down a Right to Information (RTI) request followed up by an appeal to provide information on the documents provided by a whistleblower in the Sun Pharmaceutical matter. Interestingly, the refusal is on the grounds that it will affect.
Responding to first appeal filed by an applicant, the market regulator says, "Providing copy of the complaint would reveal the identity of the whistleblower and may lead to the undesirable consequences of danger to the life or physical safety of the person."
 Interestingly, Moneylife already has a copy of the whistle-blower's letter and have also disclosed important and verifiable parts of it. However, there are no names/identification mentioned in the letter which makes it very difficult to identify anyone as the whistleblower. (Read: Whistleblower Files 150-Page Complaint with SEBI about Sudhir Valia Group, Dilip Shanghvi and Sun Pharma)
In any case, the applicant had not asked for details about the whistleblower and had specifically mentioned that anything sensitive can be redacted.  
SEBI, however, argued that, "Severing the name and personal details of the whistleblower from the complaint may not be sufficient to avoid the perceived danger, since the contents of the complaint, the language used, timing of the complaint may be sufficient to ascertain identity of the whistleblower. Similarly, the file notings in the matter may reveal identity of the dealing officials by factors similar to those mentioned above, including the handwriting, hierarchy of officials in the particular department dealing in the matter.”
“Whistleblower complaints are made with an objective that the information contained in the complaints may be used for examination of the alleged irregularities by SEBI which may result in enforcement actions. Such complaints may, therefore, be considered as a source of information and assistance given in confidence for law enforcement, which is specially exempt from disclosures under section 8(1)(g) of the RTI Act,” SEBI stated.
While denying information under the RTI Act, the market regulator accepted that "complaints from whistleblowers are vital source of information for enforcement authorities and that such complaints are relevant for SEBI in discharging its statutory obligation to regulate securities market." 
" is further observed that complaints from whistleblowers are received and held by SEBI in a fiduciary capacity, since such complaints are made under an implicit trust that identity of the complainant would be kept confidential and that allegations mentioned in the complaint would be examined by SEBI in the interest of investors and securities market," Anand Baiwar, first appellate authority at SEBI stated in its order. 
In a sensational 150-page document, a whistleblower has alleged numerous irregularities against Sun Pharma, its main promoter Dilip Shanghvi and his brother-in-law Sudhir Valia, Mr Valia’s independent financial operations, Fortune Financial and Investment Trust of India and Dharmesh Doshi, an associate of Ketan Parekh who has been convicted of wrongdoing in the stock market scam of 2001.  
Moneylife has a copy of this document filed with the regulator in mid-September. Copies of this letter have been marked to the Ajay Tyagi, chairman of SEBI and whole-time directors Madhabi Puri Buch, G Mahalingam and Ananta Barua. Sun Pharma, in an official response to Moneylife in November last year had said that it has not received any query from the regulator so far. 
The 150-page document has names, phone numbers, bank account statements and complex organisation charts of hundreds of companies, foreign investors and individuals that are acting in concert.  
In the covering letter to the SEBI chairman and the whole-time member, the whistleblower mentions that “for me to reach to this level of detailed letter to you along with the evidences gathered over a period, has taken an extraordinary level of efforts at my end and weeks of data compilation. Further it has added lot of risk to my family, my life and my family’s future." 
The whistleblower claims to be “very closely connected to the people mentioned… My association with this set of people has been for more than 23 years now and I am directly working with them for 15 years and currently as a senior executive with the group. In my career with them, I have handled their Romania, Israel, USA and Mauritius operations directly.”  
He claims not to be a beneficiary of the operations described “regularly drawing salary as my primary income and has never had anything beyond that during my entire tenure. The very reason I have decided to share this is because there are some deals that have gone bad and to cover them up from difficult questions coming along, now the management is asking the professional staff to front that event which I am not ready to do. Therefore, over a period of 6 months, I have gradually gathered all relevant evidences to present my case and bring out a rightful conclusion to this episode.”
Later, the same whistleblower sent a 172-page document to SEBI "to bring out further information of wrongdoings by Sun Pharma promoters Mr Shanghvi and Mr Valia. You may kindly refer this along with my previous submission and the contents presented therein.” 
Moneylife has written several articles on Sun Pharma, which are in the public domain. 
You may want to read…
4 years ago
SEBI is Bharath Sarkar dodging accountability through contumacious opacity. It shows by its refusal to disclose information under RTI on whistleblower document and action taken: Corruption Zindabad!
Shankhadeep Nath
4 years ago
SEBI is trying to protect the whistle blower indentity but Moneylife goes on to selectively provide contents from the report which gives out the identity of the whistle blower.
GLN Prasad
4 years ago
True. The denial appears to be genuine to protect a whistleblower. As from the style and language of the letter, there is technology to identify the person, if such other letter drafted by a whistleblower (Suspect) is already available in the system. Most Universities are using the same to check the authenticity of thesis/research papers submitted for awarding doctorate and if such material/thesis was already published by any other university, they can come to know of the original author if any. As such information can only be disclosed by near and dear insiders, they can suspect some persons and check for confirmation of their doubts and may get an idea of the whistleblower.
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