MoF chases officer who complained back to his home state

The ministry of finance (MoF) seems in no mood to forgive former Sebi whole-time member KM Abraham for taking his grouse against finance minister Pranab Mukherjee, his advisor Omita Paul and Sebi chairman UK Sinha to the prime minister.

The ministry, which took the rare step of going public against a serving senior IAS official (an August 30 press release by the ministry rubbished Abraham?s allegations that Mukherjee and Paul got Sinha to be lenient towards certain corporates), has served a show-cause notice on Kerala chief secretary P Prabhakaran, asking why action should not be taken against Abraham, who belongs to the state cadre, for service rule violations.

A senior central government official who requested anonymity told FE that in the letter, the ministry noted that Abraham violated section 16(3) of the All India Service (Conduct Rules) 1968 under which a ?member of all India service? cannot purchase an immovable property without prior government knowledge. The ministry said Abraham failed to intimate it before purchasing a flat at Kurla in Mumbai.

Also, the ministry said, there was a service rule violation in his writing directly to the nation’s highest authority and making such an allegation. An official will first have to raise such issues with his/her administrative ministry ? the finance ministry in this case.

It is alleged that Abraham had bought flats in the same complex in Kurla at concessional rates from an entity which had benefited from the sale of office space to National Stock Exchange, seen as a beneficiary of Abraham’s September 2010 order not allowing rival MCX-SX to set up an exchange for trading in equities.

Prabhakaran confirmed to FE that the Kerala government has received a communication from the Union finance ministry on the matter. ?We have received the letter from the ministry of finance and Abraham is in the process of responding to the letter,? he said.

Abraham told FE: ?I had intimated the Kerala government which controls my parent cadre before purchasing this (Kurla) property and had informed Sebi five days after the purchase. So, I have followed the highest level of accountability in my conduct.?

He added: ?Even before the finance ministry would conclude its probe on this purchase, the government has (cited the purchase) in its affidavit on the public interest litigation questioning appointment of (Sebi chairman) UK Sinha.? This he claimed was unfair and illegal.

On Monday, the Supreme Court dismissed the PIL, saying it did not involve any constitutional issue.

In its affidavit before the apex court on the PIL, the finance ministry had stated that numerous complaints were received against Abraham ranging from abuse of power to corruption. ?Though Abraham was working in Sebi and a serving member of the IAS, he neither informed nor took the permission of the ministry of finance, which is the administrative ministry of Sebi, when he purchased the flat. Neither did he take permission of the DoPT (department of personnel and training) for making this transaction,? the ministry said.

Abraham, however, maintained that he had disclosed his property transaction both to Sebi and the finance ministry in his annual property declaration.

In the affidavit, the finance ministry also denied Abraham’s allegation regarding appointments to the market regulator. The ministry said Abraham was ?frustrated? since he was denied an extension because of irregularities.

Similar things were stated by the ministry in its three-page press release in August. The ministry had then said Abraham’s allegations were ?defamatory, devoid of any truth and a complete distortion of facts.?

Following Abraham’s letters to the PM, the ministry swung into action and referred the matter to the DoPT, entrusted with managing appointments of bureaucrats. DoPT referred the matter back to the administrative ministry.

In a letter to the prime minister on July 1, Abraham had alleged that Mukherjee and Paul put pressure on Sinha to ?manage? a few high-profile corporate cases and, later, he wrote again to the PM, saying he and his family were under ?grave risk? after the original letter which the PMO sent to the finance ministry was ?leaked? by the latter.

Abraham was referring to cases against Sahara, Reliance Industries, Anil Dhirubhai Ambani Group (ADAG), Bank of Rajasthan and MCX-SX.

The finance ministry is now waiting for the response of Abraham to decide whether any follow-up action is required on the matter. The Central Vigilance Commission is probing the matter separately, on a compliant from Abraham.

A 1982 batch IAS officer, Abraham is now serving as principal secretary-higher education in Kerala. An IIT-Kanpur alumnus, he also has a PhD from University of Michigan. Abraham’s three-year term at Sebi ended in July this year. He was not given an extension in the wake of the tiff between him and the finance ministry.