Performance may get Sebi retirees an extension

Bureaucrats and capital market veterans wanting to become whole-time members of the Securities and Exchange Board of India (Sebi) might have to wait longer than expected. While there are still some months left before two of the three members retire, the industry is already abuzz with talk that they might get an extension.

The three-year term of two whole-time members, M S Sahoo and K M Abraham, will end this July. Both were appointed by the Central government in 2008. While the appointment is for three years, the government can give an extension.

According to sources, the ministry of finance is satisfied with Sebi’s functioning in the past two years, and is not in a mood to revamp the brass in one go. U K Sinha was appointed chairman only last month and it is believed two new members in such a situation isn’t desirable.

Things will be cleared by the end of this month, as the selection process, if initiated, has to be begin three to four months before a term ends. The selection process of a whole-time member is similar to that of a chairman, with the final nod coming from a Cabinet committee.

“If one looks at the last few years, Sebi has come out with some of the biggest orders against high-flying corporate entities,” said a person on condition of anonymity. “It is widely said that the quality of Sebi orders and investigations has improved after Sahoo and Abraham came on board. Also, some of the initiatives taken to improve market efficiency have not gone unnoticed.”

Sahoo is in overall charge of derivatives and new products, legal affairs, enforcement and regulation, and supervision of market intermediaries. He shares a rapport with Sinha, having worked together at the finance ministry. Abraham handles corporate finance, investigations, vigilance and integrated surveillance, among other things. The third member, Prashant Saran, assumed office in May 2009.

The work done by the two members has definitely caught the attention of bureaucratic circles of Delhi. According to a person privy to the developments, at a recent conclave of bureaucrats, some actions of the Sebi members were discussed with great appreciation.

“The conclave was attended by over 20 IAS (Indian Administrative Services) officers of joint secretary and director level. Everyone kept talking about Sebi’s good work in the last couple of years. The sense that one got was that the two members would get an extension, though there are many eyeing that position,” said this person, who attended the conclave.

Interestingly, G Anantharaman is the only former whole-time member who has the distinction of spending more than three years at Sebi, having worked with the regulator from December 2004 to March 2008. He was appreciated for his investigations and orders related to disgorgement and the IPO irregularities scam.