The finance ministry has sought the Central Vigilance Commission?s (CVC) clearance of S Sridhar, one of the two shortlisted candidates for the two vacant posts of whole-time member on the board of the Securities and Exchange Board of India (Sebi). The move, which follows adverse comments on Sridhar by the VK Shunglu committee that probed irregularities in the Commonwealth Games, could potentially delay the appointment to the market regulator?s board, which is short of two whole-time members since last month.
According to two finance ministry officials, Sridhar’s name will go to the Cabinet?s Appointments Committee headed by Prime Minister Manmohan Singh only after CVC clearance.
The Sebi board is required to have three whole-time directors, in addition to the chairman. There are also part-time directors, including two government nominees and one from RBI. The terms of whole-time directors MS Sahoo and KM Abraham ended in July, leaving Sebi with Prashant Saran as the only such member. Sahoo was in charge of legal affairs, enforcement and market intermediaries supervision and regulation. Abraham handled investigations, integrated surveillance and market regulation.
Rajiv Agarwal, an IRS officer posted in Mumbai, is the other candidate shortlisted by a panel headed by Sebi chairman and comprising government representatives. His name has already been sent to the panel for approval. If the CVC does not clear Sridhar?s name, then the process for selecting the third whole-time member has to begin afresh, as the process doesn’t leave a waiting list.
Sridhar was the former chairman and managing director of Central Bank of India, CWG?s official banker. The Shunglu panel, as reported by The Indian Express on February 23, accused Sridhar of being ?interested? in CWG contracts because one of his relatives was posted in London with the CWG Organising Committee (OC).
Before the Shunglu panel submitted its report, it had written to finance minister Pranab Mukherjee and then Cabinet Secretary KM Chandrasekhar requesting information on the Central Bank of India?s dealings with the OC.
When contacted, Sridhar told FE: ?The allegations made against the Shunglu committee report are baseless. Some interested party is trying to frame me.?
The selection committee interviewed 11 of the nearly 50 candidates who had applied for the two Sebi posts. An official said: ?The ministry has already sent Rajiv Agarwal?s name for approval from ACC, which is likely to be cleared shortly.?
The prime minister has set up a team of ministers led by defence minister AK Antony to study the Shunglu committee report. The allegations against Sridhar are yet to be proved.
The group of ministers has been asked to consider the responses of the Union ministries, the Delhi government and its various agencies to the findings of the high-level committee headed by former Comptroller and Auditor General V K Shunglu.