Sebi under Bhave: Action against big guns, power to investors

MUMBAI: From taking action against the big and the mighty of the corporate world to saving investors from fees and charges worth thousands of crores rupee, C B Bhave earned many accolades during his three-year term as Indian capital market's most powerful person.

An electrical engineer by education, Bhave, an IAS officer of 1975 batch, engineered and administered numerous changes in Indian markets ever since he took charge as the Chairman of the Securities and Exchange Board of India (Sebi) on February 17, 2008.

Bhave whose terms ends on Thursday would be succeeded by UTI Mutual Fund chief U K Sinha, also an IAS officer.

Interestingly, some of the major actions taken by Sebi under Bhave's leadership concerned mutual fund space.

As per Sebi's own estimates, the retail investors were saved from charges worth Rs 2,000 crore by the regulator's decision to bar mutual funds from charging entry loads -- a charge paid by investors for buying a mutual fund.

Although, the step invited severe criticism by the fund houses for negatively impacting their businesses, this was lapped up as one of Sebi's major pro-investor policies.

Another such move was raising the investment limit for retail investors in an initial public offering (IPO) to Rs 2 lakh from Rs 1 lakh. Introduction of ASBA system in public offers, where the money gets debited from investors' bank account only after allotment of shares, not at the time of bidding for shares was also widely welcomed.

Sebi also proposed to bring minority shareholders at par with promoters in cases of takeover of a company with its suggestion that both promoters and public investors should get same price and same opportunity to exit the company.

The proposal, however, is yet to become a law, as the government wants more deliberations on this front.

Bhave had said that it was the institution that mattered and not the person heading it. But there are not many takers for this view, including both his supporters and detractors.

"Chairmen come and go, but Sebi remains there," Bhave had said after his last board meeting at Sebi on February 7.

While those finding his steps as pro-market and pro-investors said that Bhave brought to fore the real power lying with Sebi, there were also some others who accused him of being anti-market competition and also charged him with becoming larger than the institution.

However, those in support of steps taken by Sebi under Bhave said the market regulator did not differentiate between big and small entities and took all its actions fearlessly during the past three years.