May 15, 2011 03:40 AM
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Dr MOHAN GOPAL's EXPLOSIVE EXPOSE OF SEBI's FUNCTIONING UNDER FORMER CHAIRMAN C.B.BHAVE REVEALLED.
The former member of the SEBI Board, in a letter to the prime minister, alleges how an "informal clique of current and serving bureaucrats, SEBI officials, lawyers & corporate interests orchestrated a subversion of the due process of law". It indicates Moneylife's stand on various regulatory issues that large media houses have been ignoring.
Dr G Mohan Gopal, who heads the National Judicial Academy (NJA) at Bhopal, is in the news for his letter to the prime minister, pointing to “the gross abuse of power & corrupt practices in the SEBI board” to “protect SEBI Chairman CB Bhave”. Moneylife Foundation has accessed the letter written to Dr Manmohan Singh on 24 December 2010, which was obtained by activist Subhash C Agarwal using the Right to Information Act.
The letter, we find, is far more explosive and detailed than has been indicated by media reports so far. Dr Gopal has not only described the manner in which SEBI systems & processes were vitiated to protect Mr Bhave, but it also highlights four “structural flaws” in the “legal framework for securities regulation”, something that other self-appointed market experts have been labelling as perfect & getting favourable mention in the media.
On securities law: Dr Gopal says, four structural fault lines in the legal framework for securities regulation made this abuse of power possible.
These are: 1. Inadequate transparency, public accountability; and parliamentary oversight., 2. Lack of protection against conflict of interest., 3. Ineffective framework for law enforcement, 4.Outdated governance structure.
Dr Gopal ends his five-page letter by asking the prime minister to order a high-level inquiry into SEBI decisions in relation to NSDL during Mr Bhave’s tenure & to look into the structural issues raised by him.
What did the Prime Minister do? He merely forwarded the letter to the finance ministry. Frankly, even today, this explosive letter by Dr Gopal will probably attract some media attention, only because SEBI has been forced to do an about-turn due to the activist interest shown by the Supreme Court of India into the manner in which SEBI has been subverting regulations.
