A stool pigeon and some game birds

Securities and Exchange Board of India (Sebi) chairman U K Sinha has got a 200-pound gorilla off his back. In a harshly-worded judgment, the Supreme Court bench comprising Surendra Singh and Pinaki Chandra Ghose dismissed a public interest litigation filed by Bangalore-based lawyer Arun Agrawal and argued by senior advocate Prashant Bhushan last week. The petition had challenged Sinha's appointment in February 2011 and sought his removal, citing various flaws and misdeeds in the selection process.

The judgment removed a key irritant in the extension of Sinha's tenure by a further two years. His current term comes to an end in February 2014. The bench even gave him a pat on the back saying, "It is a well known fact that in recent times, Sebi has been active in pursuing some very powerful business houses."

Not leaving their identity to imagination, in the preceding paragraph, the judgment refers to Sinha's affidavit. "The affidavit also narrates the action which has been taken by Sebi against very influential and powerful business houses, including Sahara and Reliance."

Sebi is in the process of issuing final orders in a Reliance Industries' insider trading case pertaining to transactions done in 2007. It is also engaged in legal battles with the Sahara group after the latter paid up only a fifth of the sum directed to be paid by a detailed, final order issued by the apex court over a year ago.

The judgment endorses the words used by Sinha's lawyer Harish Salve for the petitioner. "It is pointed out that the petitioner is a stool pigeon acting on the directions of these business houses. We are unable to easily discard the reasoning put forward by respondent No 4 (Sinha)."

Agrawal, the petitioner, has written a book titled "Reliance, The Real Natwar" focusing on various controversies and investigations against the group. Last year, he had won a Central Information Commission order against the group in the 2007 insider trading case against Reliance.

He also said he had unsuccessfully tried to implead himself into the Sahara-Sebi case on behalf of the investors. He has also filed vigilance complaints against MCX and the Tayal group. If at all he was a stool pigeon, it is unlikely that he was one for these business houses. Probably, he was of some others. Probably, there is something more sinister. Since the Supreme Court had this doubt, it could have ordered a full investigation by a central agency. After all, a regulatory agency can't be held ransom to such vested interests.

The court has pointed out that even within the regulator, there was vested interest at work. It concluded that the controversial letter written by the then Sebi wholetime member K M Abraham was "motivated" and "espoused no public interest". To arrive at this conclusion, the court relied on the facts that Abraham's allegations came a month and a half before his tenure was to end and cannot be relied upon without supported of "very convincing material." The court also dismissed the theories that Omita Paul kept the post of UTI AMC vacant to accommodate his brother and her role in Sinha's appointment.