Delhi High Court issues notice to SEBI & PIL petitioner

Moneycontrol Bureau
 
The Delhi High Court on Wednesday issued notices to the capital market regulator -- Securities and Exchange Board of India (SEBI) and the petitioner over a public interest litigation (PIL) filed by the latter. The notices seek their opinion to involve a third party - New Delhi-based Midas Touch Investors Association in the case. The order was issued by bench of acting Chief Justice A.K.Sikri and Justice Rajiv Sahai Endlaw.

Some four or six months back, one Deepak Khosla, a business man by profession,  had filed a writ petition challenging a SEBI mechanism called    "consent". Later, New Delhi-based Midas Touch Investors Association wanted to be a party to that PIL. Accordingly, the investors' association approached the court.

"The circular (consent) empowers SEBI to settle any type of violation, fraud and manipulation by any one, under the SEBI Act, at any stage, without accepting or denying guilt," Virendra Jain, president of Midas Touch Investors Association said in a release.

"This includes those matters which are pending before the courts or appeallate authority. Such unfettered powers can be conferred in an authoritarian state and have no place in a democracy. Being a party to the PIL we can bring in a lot additional information, which will assist the court to take the final call," he said. 
 
"The PIL application states that consent guidelines issued by SEBI have been grossly abused. It has referred to constitution and recommendations of Joint Parliamentary Committee (JPC) in wake of securities scam, better known as Ketan Parekh scam," said a release issued by the investors’ association.

JPC Report submitted to the Parliament in 2002, noted that there was a nexus between Ketan Parekh, banks and the corporate houses and recommended that this nexus be investigated by SEBI, department of company afairs, enforcement  and other investigative agencies expeditiously and action taken under relevant laws. 
 
"Midas Touch was one amongst the privileged eight unconnected organizations and individuals invited by JPC for personal deposition before it. Therefore, impleading the applicant in the PIL would enable it to assist the Hon’ble Court in dispensing justice. Our credibility was evident when the JPC accepted many of our recommendations, " Jain told Moneycontrol.com.

The next hearing for the case will be held on August 07. Many believe, SEBI is unlikely to give any opinion in favour of any third party involvement. However, the High Court will give the final verdict.