Home / Politics / Policy /  SC upholds U.K. Sinha’s appointment as Sebi chairman

New Delhi/Mumbai: The Supreme Court on Friday upheld the appointment of U.K. Sinha as chairman of the Securities and Exchange Board of India (Sebi), the capital market regulator, dismissing an item of public interest litigation (PIL) challenging it.

The order by justices S.S. Nijjar and P.C. Ghose said the appointments of Sebi’s chairman and its whole-time members were in accordance with the law.

The court was ruling on a PIL filed in September 2011 challenging the finance minister’s power to nominate two additional members in the selection committee for the appointment of the chairman and whole-time members of Sebi. The PIL alleged irregularities in the appointment of Sinha as Sebi chairman and sought to quash it.

The order, pronounced in open court, said that the court could have dismissed the petition as it was not maintainable on several grounds.

“However, we have chosen to examine the entire issue to satisfy our judicial conscience that the appointment to such a high-powered position has actually been made fairly and in accordance with the procedure established by law," the order said.

Sinha has opposed the PIL since the beginning. On Friday, he didn’t respond to calls and a text message seeking comment. A Sebi official, too, declined to comment

Last year in September, the apex court issued notices to the government and the Sebi chairman, asking them to file their replies on the alleged irregularities in the appointment.

At that time, the apex court also made Omita Paul, the president’s secretary, a party to the case.

Paul was the adviser of then finance minister Pranab Mukherjee when the decision to appoint Sinha as Sebi chairman was taken by the government. The petitioners had alleged that rules were bent to facilitate Sinha’s appointment by side-stepping other eligible candidates who had applied for the post.

In January 2011, a month before Sinha’s appointment as Sebi chairman, the government modified the norms, allowing the finance minister to nominate two more members on the selection committee.

Earlier, the committee comprised five people, including two government nominees.

The petition filed by a Bangalore resident, Arun Kumar Agarwal, and retired police officer Julio Ribeiro had challenged the change in the norms governing the composition of the selection committee, among others. It alleged that the rules were changed by the government under pressure from companies.

Prashant Bhushan, a senior counsel representing Agarwal in the apex court, said: “I am yet to see the judgement. We will see what can be done after going through the order."

Sinha, 61, replaced C.B. Bhave as Sebi chairman. 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 mutual fund house UTI Asset Management Co. Ltd, from where he moved to the capital market regulator.

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