Recent instances of CBI investigating into decisions taken by sectoral regulators has not just emerged as a cause of worry for the regulatory bodies as even finance minister Arun Jaitley seems ‘concerned’. He stated that he is looking into matter to find solutions.
Responding to a question on the issue, Jaitley said, “I am concerned and I am concerned for the fact that if there is a decision taken with a dishonest motive of a collateral reason, I am sure criminal law can investigate that. But if pursuant to their quasi-judicial jurisdiction they decide a case and the decision may be honestly erroneous then I don’t think criminal law has a place. It has been pointed out to me and I am trying to see what I can do into this.” He was speaking at the Idea Exchange program of The Sunday Express.
Sources close to the development told The Sunday Express that the working of regulators was getting affected because of the CBI intensifying its investigation into decisions taken by Sebi.
An official with a financial sector regulator said that while CBI can investigate into the decisions of Sebi, they should not make things public before reaching a conclusion. “They should first finish the investigation in the case and only after they have come out with a conclusion they should make things public or disclose to the media,” said a regulatory official who did not wish to be named.
He further added that, “Such behaviour is leading to loss of credibility of the regulator not just in the eyes of the stakeholders but also among foreign investors.”
Experts say that this is a new development and it is only over the last one year that the CBI has intensified its investigation into regulatory decisions.
Earlier in 2014, the CBI initiated an enquiry against a senior Sebi official for allegedly weakening the case against the against the promoters of Bank of Rajasthan that was being probed by the regulator. Several senior officials have already been questioned by CBI over the last few months.
Also two months back, in February, in the case of Saradha chit fund scam, The Supreme Court asked CBI to carry out investigations against the Reserve Bank of India (RBI ) and Sebi in order to check their conduct.
“We have directed investigation into conduct of Sebi. The question is not only about effectuating a mechanism but to also ensure such scams do not recur. If these regulators like the Sebi and RBI turned a blind eye, they need to be taken to task,” said the Supreme Court bench of Justices TS Thakur and Adarsh Kumar Goel in February, 2015.
In another case relating to grant of sanction to MCX-SX to function as a full-fledged private stock exchange, CBI filed FIR against some Sebi officials and a former ED along with that on Jignesh Shah, Jignesh Shah and FTIL.