Finance Ministry Interference in SEBI – Is SEBI Money Making tool for Finance Ministry ?

In a series of Articles we would like to expose the working of Securities and Exchange Board of India – SEBI which is supposed to be the toughest regulator for Hundreds of Billions of Dollars of Investments in India. We will grant you Full Access to RTI Files obtained in this issue, you can decide yourself.

K M Abraham an IAS officer was one of the board members of SEBI[He was not given extension, probably because he was Honest] has written to the Prime Minister of India about the interference of Finance Ministry Officials in the day today working of SEBI. The Prime Minister instead of investigating the case himself sent to the Finance Ministry – You Decide Is Manmohan Singh Correct in refering the case to Finance Minister when allegations are against FM ? [Recall Satyendra Duby Case, He was a Whistleblower and had written to PM and you know what fate he met with ?]

Abraham in his letter specifically writes about the vested interest of FM in some of the pending cases with SEBI. Smt Omita Paul – Advisor to Finance minister controls everything. Bimal Julka Additional Secretary is the Schemer and Thomas Matthew Jt. Secretary is the Executor.

Abraham on Page 6 of his letter to the PMO writes,

The Admission of the Chairman in his own words about the need to ‘manage’ some of the cases now live in SEBI , about the interest the Union Finance Minister has in some of them, the admission that Smt Omita Paul is behind what is happening, the difficulty that he is experiencing in interacting with key ministry officials – Suggest to me that Shri Sinha is being pressured to intervene in several cases that are currently being dealt with in SEBI.

On Page 7, Point 18 Abraham Mentions,

A feeling is now gradually becoming pervasive in the investigative arm that it would be easy now for offenders violating laws and regulations relating to securities market to thwart enforcement process itself by approaching SEBI through the Ministry of Finance.

Mr. Abraham has said in the affirmative that he is willing to testify the above facts under oath in any appropriate judicial or administrative forum. He prays that the Prime Minister will intervene in the best interest of the country. However, PMO refered the matter directly to the accused – FM. You Decide What will be the fate of this Country.

You can view the Full text of SEBI Board Member K Abraham’s letter written to the Prime Minister here [PDF]

In the first Week of Sept-2011, the Supreme Court admitted a petition challenging the appointment of SEBI Chairman, Mr. U K Sinha where selection committee rules were compromised to push on Mr. U K Sinha. We hope that Mr. Sinha will be thrown out of the Office of SEBI and a competitive Officer such as Mr. Abraham be appointed to the Chairman’s Post. What say ?