Chandrasekhar Bhaskar Bhave will be a tough act to follow. In a short time span, of just three years, Bhave has managed to transform the Securities and Exchange Board of India (Sebi) into a stronger, more effective and probably even feared organisation. Under his chairmanship, Sebi has truly regulated the way a regulator ought to, without any fear or bias. It must be said that much of the stature that Sebi has now acquired is the result of Bhave?s personal integrity and courage and the capital market regulator could lose much of the respect that it now commands, unless the new chairman, UK Sinha, is as assertive and uncompromising. Indeed, with several successful convictions, fewer cases lost at the Securities Appellate Tribunal (SAT), quicker access to the capital markets and a new takeover code in place, Bhave has done a great job in the last three years, despite the many pulls and pressures. His list of achievements is a long one but he will be remembered most for having had the courage to take on big industrialists like Anil Ambani, with whose companies Sebi recently entered into a consent order following an investigation relating to trades in the Indian market with funds borrowed overseas. Indeed, it speaks volumes for the regulator that it even attempted to look into an insider trading case, relating to shares of the erstwhile Reliance Petroleum and that it has reportedly walked away from a plea bargain with Reliance Industries, on two occasions, because the amounts offered by the company were too small relative to the estimated profits of Rs 500 crore. Bhave has been able to say no where it was deserved; Sebi turned down MCX-SX?s application to set up an equities trading platform because it believed that the promoters had control of more than 5% of the equity, of the proposed exchange, which was against the rules.
That Bhave is an able administrator, perceptive and balanced, and willing to experiment is seen in the many changes that he introduced; firms accessing the markets for the first time can have anchor investors, there?s a level-playing field for retail and institutional investors, an option of a French auction for follow-on public offers and currency futures and options for those who want them. All that Mr Sinha needs to do is carry on the good work, continuing to reform the system while bringing offenders to book. Above all, the message to the market should be the same as his predecessor?s: Sebi means business.
