Gyan Bhushan to replace RK Padmanabhan as Sebi CVO

Move comes amid CBI PE against Padmanabhan in BoR case and PIL against Sebi over non-compliance of CVC norms

 

The Securities and Exchange Board of India (Sebi) has appointed Gyan Bhushan as chief vigilance officer (CVO), replacing R K Padmanabhan, who held the position for about three years.

The move comes at a time when the Central Bureau of Investigation (CBI) has initiated a probe into Padmanabhan’s role in the investigation in the Bank of Rajasthan case.

Top CBI officials confirmed the development, stating: “The agency is looking into the role played by Padmanabhan in weakening the (Bank of Rajasthan) case.”

A public interest litigation (PIL) also has been filed in the Bombay High Court against Sebi, along with other regulatory bodies, over the practices while appointment of vigilance officers.

Bhushan is also the executive directors at Sebi, handling the surveillance charge. Meanwhile, Padmanabhan will continue to operate as executive director at Sebi in the investigation department.

A query sent to Sebi seeking confirmation didn’t elicit any response.

The PIL filed by Indian Council of Investors came up for hearing in the high court on Friday.

Sebi made a submission in the matter, stating that it has made a policy decision not to appoint an officer handling sensitive portfolio as a CVO. The court directed Sebi to make a written submission in the case, which will be heard on October 9.

Separately, minority shareholders of the bank have filed a writ petition against Sebi over inadequate penalty imposed by the regulator on the promoters of the erstwhile lender. The writ petition also has contested the dual role played by Padmanabhan as CVO and head of investigation department at Sebi.

In the bank's appeal, the court has directed Sebi to file a reply before September 30.

The minority shareholders have alleged that the promoters of the bank made wrongful gains of about Rs 700 crore by making improper disclosures. Sebi had imposed a penalty of just Rs 30 crore against the promoter group entities in 2012.

Sebi has stated that it does not comment on the quasi judicial orders, when previously queried on this matter.

The market regulator had, however, stated that it has sought guidance from the Chief Vigilance Commission, a regulatory body governing vigilance work in autonomous regulators.