New Delhi: Market regulator Securities and Exchange Board of India (Sebi) has come under the scanner of Comptroller and Auditor General of India, as the apex auditor has charged the regulator with not following official guidelines to keep surplus funds earned by it with the government.
“Despite clear orders from the Government of India, Sebi continued to maintain its surplus funds generated through fees/charges, turnover fee and penalties etc aggregating to Rs706.82 crore as at the end of March 2007 outside the Government Accounts,” CAG said in its report.
The practice of regulatory bodies like SEBI maintaining their accounts outside the government is not only violative of government instructions but also inconsistent with the constitutional provisions, said CAG, adding that it has been able to do so only due to the failure of Finance Ministry to enforce its instructions.
CAG also alleged that Finance Ministry’s approach on the violation by SEBI was ‘lackadaisical´ and it failed to make the market regulator comply with its orders.
Also pointing out that Finance Ministry did not exercise its powers, CAG said that even in the face of non-compliance of its orders and despite being convinced of the constitutional impropriety of the action by SEBI, the ministry did not issue an directions to it.
The CAG also recommended that the ministry should take immediate measures to credit receipts of SEBI to the government account.
“The regulatory bodies have apprehensions that their autonomy might be compromised with if their receipts are credited in the government account,” CAG pointed out, adding that such apprehensions are unfounded.