Mumbai: Senior bureaucrat and chairman of UTI Asset Management Co. Ltd U.K. Sinha will become the next chairman of the Securities and Exchange Board of India (Sebi).
A Central government panel headed by cabinet secretary K.M. Chandrasekhar has chosen Sinha from a list of candidates including senior bankers and bureaucrats, according to three persons familiar with the development.
A formal announcement by the government is expected in January.
Sinha, who will assume office in the third week of February, declined comment.
A self-confessed “music aficionado”, Sinha brings to the table a rich experience in capital markets. A 1976 batch Indian Administrative Service officer from the Bihar cadre, he was a joint secretary in charge of capital markets in the ministry of finance before heading UTI Asset Management, India’s fourth largest mutual funds by assets. Sinha is also the current chairman of the Association of Mutual Funds of India, or Amfi, the industry lobby group.
Besides, he has headed a recent committee set up by the Central government to rework the framework governing foreign investments.
A postgraduate in mathematics and a lawyer by education, Sinha started his career as a probationary officer in State Bank of India.
As joint secretary in the banking division of the ministry of finance, he played a key role in the merger of ICICI Ltd with ICICI Bank Ltd to create India’s first universal bank. Between June 2002 and October 2005, as joint secretary in the department of economic affairs, he made key decisions on issues relating to the capital market, external commercial borrowings, pension reforms and foreign exchange management.
In 2005, he was chosen to lead UTI Asset Management when its then chief M. Damodaran was picked for the post of Sebi chairman. While Damodaran as well as incumbent C.B. Bhave had a three-year term, Sinha, who turns 59 in March, will have a five-year term.
During Bhave’s eventful three-year term, that comes to an end on 18 February, the global markets witnessed an unprecedented crisis and the local market went through several landmark policy changes for mutual funds, the primary as well as secondary markets.
A series of changes beginning with the banning of entry loads have altered the face of the Rs 7 trillion mutual fund industry. While investor interest has been protected, fund houses are still trying to adjust their business models to the regulatory changes.
As head of UTI Asset Management, Sinha was at the receiving end of the regulator’s move to ban entry loads on mutual funds last August. He had then called for a level playing field across different product categories such as mutual funds and insurance policies.
Bhave wanted to create a level playing field by having a say in the regulation of unit-linked insurance plans, or Ulips, but could not do so. Both Sebi and the insurance regulator fought hard and when there was no solution in sight, the finance ministry stepped in and asked both to seek a legal solution that would be binding. But before the court could take it up, the government issued the ordinance to settle the matter in favour of the insurance regulator.
Being Sebi chairman, Sinha will decide on the fate of two key policy papers introduced during Bhave’s term. A panel headed by C. Achuthan has redrawn the rules governing corporate takeovers and another panel, headed by former Reserve Bank of India governor Bimal Jalan, has recommended the framework governing market infrastructure institutions such as stock exchanges, depositories and clearing corporations.
Both these reports have certain controversial provisions and they will keep Sinha busy in the initial days, especially the takeover code as the Sebi board has already begun discussions on the draft.
Then there are orders against MCX Stock Exchange Ltd and the Sahara group, challenged in the courts.
Sebi also slapped show-cause notices against Anil Ambani, the head of the Reliance-Anil Dhirubhai Ambani Group, and has been pursuing insider trading charges against Reliance Industries Ltd, India’s most valuable firm by market capitalization.
These and investigation into India’s biggest corporate scam, at the erstwhile Satyam Computers, are expected to be high on Sinha’s priority list.
A love for music and Urdu poetry will probably help him fight the stress associated with a market regulator’s job. “In the mornings, while walking, I listen to music on my iPod. Everyday, I enjoy listening to music for an hour after reaching home... Listening to music, while driving to work or back home, is very relaxing,” Sinha wrote in a newspaper early this year. “Indoor games like bridge also help me unwind; being good at numbers helps there, I guess. I love analysing numbers, having done my postgraduation in mathematics and statistics.”
Corporate affairs secretary R. Bandyopadhyay, department of disinvestment additional secretary S. Pradhan, Madhya Pradesh principal secretary G.P. Singhal and two State Bank of India managing directors, S.K. Bhattacharya and R. Sridharan, were contenders for the post.
The panel, headed by Chandrasekhar, includes financial services secretary R. Gopalan, department of personnel secretary Shantanu Consul and finance secretary Ashok Chawla.