Last week, the central information commission (CIC), the apex body under the Right to Information (RTI) Act, 2005 directed the Securities and Exchange Board of India (Sebi) to reveal certain details related to Reliance Industries (RIL), the largest listed company.
Arun Kumar Agarwal, a Bangalore-based lawyer asked for the names of 12 entities that short-sold Reliance Petroleum shares in the derivatives segment before RIL sold 4.1 per cent 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 & Kashmir. Covered under the Act are all bodies “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”.
|PRIVATE SECTOR: INDIRECTLY UNDER RTI|
While the definition does not cover private corporations, experts are trying to get critical information by asking the “right questions to the regulatory authorities through RTI”.
Sector regulators such as the Sebi, the Reserve Bank of India, the Directorate General of Hydrocarbons, the Trai, etc are covered by the Act and have designated chief public information officers to address RTI queries. Many of these regulators, including the RBI and the Sebi, are putting in constant efforts to put up a significant portion of their dealings in the public domain through their websites. The Sebi, for example, puts out the agenda of board meetings on the website after the decisions are announced.
Earlier this year, an RTI reply by the National Pharmaceutical Pricing Authority (NPPA) revealed that top companies such as Cipla, Ranbaxy and Dr Reddy's Laboratories had been penalised hundreds of times for overpricing. The amount ran into thousands of crores of rupees while the NPPA had recovered only a fraction of it from the companies.
It’s not just the regulators; government departments such as the income tax department, which receives regular filings from companies, also sit on a wealth of information.
In July, Meghalaya-based activist Michael N Syiem revealed how some cement companies, such as Meghalaya Cements, Satar Cements and Adhunik Cements, etc operating in the state received more subsidies than the taxes they paid. According to Syiem, the companies benefited from the resources and infrastructure of the state, but neither did that result in any tangible benefit for the local people nor did it bring down 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. A query came on the actual expenses spent by Korean major Posco’s venture in Odisha.
Agarwal says the green initiative by the government has also inadvertently helped 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 accessible under Section 610 of the Companies Act cannot be claimed under the RTI Act. The ruling could clip the wings of RTI activists, as other government bodies could also take shelter under the ruling, analysts say.
Another challenge is the reluctance on the part of regulators to share what according to them are sensitive data. For example, the Sebi does not reveal details of cases under investigation or adjudication proceedings under the RTI. One of the reasons it cited was it would be unfair to reveal details of entities, as there was a possibility the allegations might not be proved at the end of such proceedings.
However, information seekers have argued that even in heinous crimes such as rape and murder, 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 the Sebi will agree or appeal against that will be clear soon.