According to RS Loona, executive director, Sebi in charge of the legal department, Sebi needs to be given power of disgorgement and class action to act on the behalf of investors in certain cases where other regulatory agencies have not adequately taken care of investors interest.
He was speaking on Investor protection laws conducive to the global environment at the two-day international seminar on Emerging Capital Markets, organised by India International Law Foundation jointly with UNIDROIT and Sebi in Mumbai on Wednesday.
He pointed out that in a number of cases Sebi had raised the matter with the Supreme Court (SC) wherein the lower authority had not dealt adequately with the investors interest. In the case of Sterlite Industries, Sebi has filed a review petition with SC against the High Court, Mumbai ruling on the scheme of arrangement with respect to amalgamation with one of the group companys of Sterlite. The SC is yet to pass its judgement on the matter.
Similarly, in the case of Wimco, the SC decision is awaited with respect to a review petition on the issue of penal interest and to whom it should be paid. With respect to investor protection, he said, Sebi is in the process of setting up an ombudsman for the securities market. Some steps have been taken in that direction at Sebi, he added.
He advocated a provision in the law to have a fair fund on the lines of SARBANSOXLEY Act, which provides for a fund that can be used for compensating investors from the losses suffered by them.