The Securities and Exchange Board of India (Sebi) is determined to trim the mountain of pending investigations and enforcement action, which delay justice and expose its own officials to disciplinary action. According to two people aware of the matter, a Sebi board meet expected by the end of the month will take stock of all pending investigations, and adopt a panel report suggesting steps to increase efficiency in investigations and passing orders.
“Every department of the regulator has been asked to submit a list of pending investigations, inquiries and adjudication proceedings. After his extension, the chairman has made speedier resolution of cases as one of his priorities. He wants to reduce the pile-up of cases,” said the first of the two people cited above, both of whom spoke under condition of anonymity.
As per latest data, there are 408 enquiry proceedings pending with the Sebi board, that is, at the level of whole-time members and chairman, besides nearly 1,400 probes pending with individual officers.
“Internally, adjudicating officers are being asked to explain to chief vigilance officer (CVO) why there is a delay in passing of orders after six months from the date of issuance of show cause notice (SCN) or the date of hearing,” the second person added.
As per the Central Vigilance Commission (CVC) guidelines, a delay in decision-making can be construed as misconduct liable for suspension and withholding of promotions.
Sebi is planning punitive action in the next months in several big cases including alleged corporate governance lapses by Raymond Ltd and InterGlobe Aviation Ltd, disclosure lapses by Franklin Templeton India and Sun Pharma Ltd, insider trading in Aptech Ltd, fund diversion at CG Power and Industrial Solutions Ltd and NSE’s algorithmic trading and co-location case.
The people cited above said the Sebi board will also adopt the Justice A.R. Dave committee report, which recommended steps to improve the market regulator’s enquiry and enforcement processes.
The panel had made recommendations on four main areas —avoiding duplication of proceedings to reduce timeline for passing final orders; improving recovery processes; quantifying alleged gains while levying penalties; and interplay between Sebi norms and provisions of the Insolvency and Bankruptcy Code (IBC).