MoF, DCA at odds over search powers to Sebi

new delhi: the ministry of finance and the department of company affairs are locked in a turf war on the vexed issue of empowering sebi with search and seizure powers. the contentious issue will now be solved only at the cabinet level, sources said. mof and dca, at a recent meeting, failed to agree on the need to limit sebi’s proposed search and seizure powers only to sharebroking firms and stock market operators. while mof maintained its stand that empowering sebi would not impinge on the powers of dca, the latter refused to agree to the provisions of the proposed sebi amendment act empowering sebi to search and seize the books of accounts of companies registered under the companies act, 1956. finance ministry officials said dca’s fears were unfounded and the proposed amendments to the sebi act would only empower sebi to seek information on capital market-related offences. dca had raised fears that the move would impinge on its inspection powers. mof is in the process of moving a cabinet note which would permit sebi to seek information on capital market related offences following clearance from the courts. dca is, however, seeing this as an encroachment on its own powers and the provisions of the companies act, 1956 and today’s meet was aimed at resolving the overlapping issues. finance ministry officials said sebi regulations already talk of these offences and the amendments would only empower the market regulator to look at issues which are already being delegated under the companies act. these include sebi powers to regulate the process of raising funds from the public and trading in the secondary markets. other functions relating to companies such as filing of balance sheets, maintenance of accounts, their inspection would continue to remain within dca.