Sebi, govt at loggerheads over selection of EDs

MUMBAI: The Securities and Exchange Board of India’s (Sebi) plans to recruit two executive directors has run into trouble due to differences between the government and the market regulator over the appointments.
Sebi had in December selected KL Dhingra, a finance director with Indian Rare Earths, and Vipul Desai of Mafatlal Industries as executive directors (EDs). Sources said the government has not given the final nod for the appointments after it received complaints that Sebi did not follow procedures during the recruitment.
The Sebi board, the complainants allege, interviewed about 23 shortlisted candidates in just three hours on November 29 in Mumbai.
A public interest litigation (PIL) has been filed in the Delhi High Court against the appointment. The PIL was filed by Sanjay Pandey, a former DCP, economic offences wing (EOW) Mumbai, one of the applicants. Mr Pandey’s application, was not even considered by Sebi as it was apparently misplaced. Mr Pandey is an IPS officer, with Masters from Harvard University, BTech from IIT Kanpur. In a letter to finance minister Jaswant Singh, Mr Pandey has called for a high-level independent judicial enquiry into the whole process.
This is the first time that the market regulator is recruiting directly, a break from the past when senior IAS and IRS officers were sent on deputation.
Eyebrows were also raised over the manner in which appointment letters were issued without clearance from the Central Vigilance Commission. Sebi in June ’01, it invited applications for the post of ED from persons with capital market related experience and it had received about 200 applications.
Meanwhile, the market regulator is suffering from shortage of top level officials as no replacements have been made for the two EDs who retired. RM Joshi who handled key areas like primary market, takeovers, mutual funds and CM Mehra who handled administration and investigation retired last year. Now, all the key areas like primary market, mutual funds, secondary market, derivatives are handled by Pratip Kar.
While CS Kahlon handles investigations, DN Raval handles legal affairs.