SEBI sought more Time from SC to give its Views on Committee’s Report on IPO Scam

Market regulator SEBI on 25 April 2011 sought more time from the Supreme Court to give its views on the report of a high-powered committee that probed the IPO scam of 2006 and NSDL’s role in it. It was informed that the IPO scam will top the agenda of the board meeting of SEBI scheduled on 26 April 2011.

 The apex court had asked SEBI on 28 March 2011 to reply within four weeks whether it would revisit its decision to give a clean chit to NSDL (National Securities Depository Ltd) in the IPO scam related to share allotment irregularities in various initial public offers (IPOs) between 2003 and 2006. The Supreme Court had asked SEBI to consider whether its board will reconsider the special committee’s 4 December order in respect of NSDL and DSQ Securities. SEBI was also asked to pass an appropriate resolution and place it before this court. NSDL was given clean chit last year by SEBI when C.B. Bhave was its chairman.

The Supreme Court was not satisfied with his reply that the SEBI board has already taken a decision on the report of the committee.

The Ministry of Finance had set up a committee consisting of two SEBI members G. Mohan Gopal, now Director of National Judicial Academy, and V. Leeladhar to look into the IPO scam. The Committee had passed three orders and found that NSDL had failed in its duty. Also remarks were passed against the manner in which SEBI had functioned in the IPO scam.

The apex court had earlier expressed concern over SEBI’s outright rejection of the report by the Committee and had asked the market regulator to give its stand. The apex court was also not convinced by the submissions of SEBI that the committee exceeded its limit.

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