Scam: RTI Pushes Sebi To Hand Over Files In Indiabulls Case

The Securities and Exchange Board of India (Sebi) will soon issue an order relating to the handing over of files that deal with a ban imposed on Indiabulls Securities in April 27, 2006 by the capital market regulator, and its immediate withdrawal within 24 hours.

This follows an application under the Right to Information (RTI) Act by YP Singh, a former IPS officer.

While over 200 entities were banned by the market regulator, in what has now come to be called as the IPO scam, only Indiabulls was let scot-free the next day.

The scam related to the connivance of broking entities and some others to corner large chunks of the retail portion of IPOs, using fictitious accounts.

While agreeing to furnish all documents from Sebi’s side within a week, an official with the market regulator said that an order would be issued only after Indiabulls files its written objections to parting with its clients’ personal information.

Singh and Indiabulls representatives were heard by VK Chopra from Sebi’s appellate authority, following an order from the Central Information Commission.

Singh said, “The disclosure of information is in the interest of lakhs of investors who have risked their life’s savings with Indiabulls. It will bring further accountability of public servants.”

RTI activist Kewal Semlani, who argued on behalf of Singh, said, “There is a need to know what happened within those 18 hours to revoke the suspension.

The need of overwhelming transparency and large public interest justifies parting with such information,” he added.

It all began in February this year when the Central Public Information Officer (CPIO) of Sebi, RK Nair, refused to grant information to Singh’s application, stating that investigations were still underway.

Singh filed an appeal with Chopra, who upheld the CPIO argument. Following this, Singh appealed before the Central Information Commission last month.

Indiabulls responded by objecting that disclosure of such information would seriously damage its functioning and reputation.

Singh argues that the entire episode of imposing the ban and lifting it in the same breath, smacked of favouritism, producing newspaper clippings which reported how “high level interventions made the public authority change its position within 24 hours,”

In its order, the Central Information Commission asked Sebi to examine the case by calling all parties involved and summoning all records.