CVC seeks info from Finmin on Sebi member appointment

Wants to know whether vigilance clearance was granted to whole time member, Prashant Saran

The chief vigilance commissioner (CVC) has written to the finance ministry, asking whether vigilance clearance was granted to Prashant Saran, the whole-time member of the Securities and Exchange Board of India (Sebi). The said query was on the period when the member’s tenure came up for renewal in 2012.

In the letter, dated October 15, a copy of which is available with Business Standard, the commission has stated that it has received a complaint that Saran’s appointment took place without the clearance from the ministry.

“The Department of Economic Affairs (DEA) is requested to verify all such appointments of whole-time members in Sebi and to confirm that such appointments of whole-time members were made with necessary vigilance clearance,” stated the CVC. An email sent to the Sebi did not elicit any response.

The complaint was first made by Radhey Shyam Agarwal, former senior manager, Bank of Rajasthan. He had alleged that the vigilance clearance was given internally by the then Sebi vigilance officer.

As per the procedures for appointment of chairman and members, vigilance clearance is granted by the concerned ministry. In the case of Sebi, the concerned ministry department is DEA.  The CVC and the government have been arguing for over a decade on oversight of regulatory authorities such as Sebi and Insurance Regulatory and Development Authority of India (Irdai).

The CVC has since 2004 been seeking from its controlling ministry, the department of personnel and training (DoPT), a list of regulatory bodies under its jurisdiction.

According to the CVC website, the commission has vigilance powers over central government officials, executives in PSUs, banks and insurance companies, and staff of the Reserve Bank of India, NABARD and SIDBI. Quasi-judicial bodies like Irdai, Telecom Regulatory Authority of India and Sebi do not figure in the list.  But, for now, the issue has been put to rest as recently the two government departments have come to an understanding that Sebi and Irdai are governed by CVC regulations.  “Sebi and Irdai appear to be under the impression that they are not subject to CVC jurisdiction. But based on discussion with DEA and department of financial services (DFS) it has been settled that they are also under CVC jurisdiction. We will formalise it shortly, to clear the matter,” said a senior ministry official.