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Last week, the central information commission (CIC), the apex body under the Right to Information (RTI) Act, 2005 directed Securities and Exchange Board of India (Sebi) to reveal certain details related to Reliance Industries, the largest listed firm.
Arun Kumar Agarwal, a Bangalore-based lawyer has asked for the names of these twelve entities that short sold Reliance Petroleum shares in the derivatives segment before RIL sold 4.1% in the cash market and booked revenues of over Rs 4,000 crore.
RIL is not alone. Activists like Agarwal have been using RTI effectively to bring out critical details about big business. The RTI Act extends to the whole of India except the State of Jammu and Kashmir. Under the Act, all bodies, which are constituted under the “Constitution or under any law or under any Government notification or all bodies, including NGOs, which are owned, controlled or substantially financed by the Government “are covered under the Act. While the definition does not cover private corporations, experts are trying to get critical information out by asking the “right questions to the regulatory authorities through RTI.” Sectoral regulators such as Sebi, Reserve Bank of India, oil and gas regulator Directorate general of Hydrocarbons and telecom regulator TRAI, pharma regulator etc are covered by the Act and have designated chief public information officers to address RTI queries. Many of these regulators including RBI and Sebi are putting in constant efforts to put up a significant portion of their dealings in public domain through their respective websites. Sebi, for example, puts out agenda of board meetings on the website after the decisions are announced. Earlier this year, an RTI reply by the National Pharmacheutical Pricing Authority (NPPA) revealed that top companies such as Cipla, Ranbaxy and Dr Reddy's Laboratories have been penalised hundreds of times for drug overpricing. The amount ran in to thousands of crores while NPPA had recovered only a fraction of it from the companies. It’s not just the regulators, government departments such as income tax department, which receives regular filings from the companies also sit on a wealth of information. In July, Meghalaya-based activist Michael N Syiem revealed how some cement companies such as Megahalya Cements, Satar Cements and Ahunik Cements etc operating in the state received more subsidies than the taxes they paid. According to Syiem, the companies benefitted from the resources and infrastructure of the state, but neither did this result in any tangible benefit for the locals nor did it bring down the cement prices. There have also been instances where some activists have sent RTI queries to the Prime Minister’s office seeking details about a particular project.
The query came on the actual expenses spent by Korean major Posco’s venture in Orissa. Agarwal says the green initiative by the government has also inadvertently helped the information seekers. “Corporations are vulnerable. They have to put out all financial information online. On top of it, there is MCA21, wherein you can access the filings with the ministry of corporate affairs. What more do you want to catch them?” he quips. Interestingly, the Delhi High Court recently ruled that documents which are accessible under the Section 610 of the Companies Act cannot be claimed under the RTI Act. The ruling, which came in the case of Registrar of Companies v/s Dharmendra Kumar, could clip the wings of RTI activists as other government bodies could also take shelter under this ruling, analysts feel. Another challenge is the reluctance on the part of regulators to share with what according to them is sensitive data. For example, Sebi does not reveal details of cases under investigation or adjudication proceedings under the RTI. One of the reasons it cited was that it would be unfair to reveal details of entities as there is a possibility that the allegations or charges may not be proved at the end of such pending proceedings. However, information seekers have argued that even in heinous crimes such as rape and murder, even eminent people are named and on occasions even sent to jail. But later they get acquitted. The CIC upheld this argument in the recent RIL case. Whether Sebi will agree with this argument or appeal against this will be clear on Friday, when the ten-day deadline given by CIC ends.