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Photo: Mint
Photo: Mint

CVC calls for action on appointment of Sebi member

The CVC action comes after Delhi HC in March observed that the vigilance clearance to Prashant Saran was not given by economic affairs department

Mumbai: Central Vigilance Commission (CVC), the watchdog for corruption in public institutions, has called for action from the department of economic affairs (DEA) in the matter of reappointment of Securities and Exchange Board of India (Sebi) whole-time member, Prashant Saran, for a second term in 2012.

In a letter dated 9 May, a copy of which is with Mint, the watchdog has said that Saran’s reappointment as Sebi member in August 2012 was done without proper vigilance clearance from the Central Vigilance Officer (CVO), which in the case of senior appointments at market regulator is the DEA.

“Necessary action may be taken with reference to validity of vigilance clearance accorded to Saran and its effect on his appointment," said the CVC letter to DEA.

An e-mail sent to a Sebi spokesperson on Monday went unanswered. Text messages and attempts to seek a response from Saran were also not answered.

The CVC action comes after the Delhi high court order dated 23 March 2016 where the court observed that the vigilance clearance to Saran was not given by DEA, the nodal ministry, but was accorded by then Sebi vigilance officer R.K. Padmanabhan.

Padmanabhan, an executive director with Sebi in 2012, was also heading the investigation department of the market watchdog and was reporting to Saran.

“No reference has been made to the commission seeking vigilance clearance in respect of Shri Prashant Saran for appointment as whole-time member, Sebi," said the CVC letter.

Incidentally, two other officers seeking appointment at watchdog were denied appointment due to lack of vigilance clearance from their respective ministries.

Saran’s tenure at Sebi comes to an end on 25 June. The finance ministry in February this year floated an advertisement to replace him.

Saran heads two critical department of the regulator—corporate finance department and investigations and enforcement cell.

Saran joined the market regulator from the Reserve Bank of India (RBI) as a member in May 2009 for a three-year tenure. He was awarded an extension in 2012 for five years or until he turned 65.

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