In a letter dated September 28 to SEBI chief Ajay Tyagi, Swamy said that the market regulator was not doing its duty “just because the complaint was against Tatas”.
In a letter written to SEBI Chairman Ajay Tyagi, BJP MP Subramanian Swamy has accused the market regulator of turning a blind eye to insider trading at Tata Group companies and relied on 'denial of wrong-doing by interested parties'. Swamy goes on to add that SEBI has given a clean chit to some Tata enterprises without investigating charges which were eight months old, reports the HinduBusiness Line.
The case refers to former Tata Group Chairman Cyrus Mistry of accusing Ratan Tata, who didn't have a managerial role, of asking for price-sensitive data and meddling in group affairs. Swamy had written a letter to the government earlier calling its attention to the alleged insider-trading charges brought on by Mistry.
The letter says SEBI had asked the audit committees of the respective companies to conduct investigations into the insider-trading charges.
Swami alleges that SEBI, in handing over the investigation to these audit committees, was acting irresponsible as those 'accused' against whom the charges were framed were participating in the investigation. As such, those "accused and interested parties were acting against themselves."
“The Audit committee, whose members are interested parties in the allegations being made against them, have no role to play in an investigation which is the responsibility of SEBI,” Swamy alleged.
“The regulator has wrongfully accepted or relied on statements which are self-certification by interested parties,” he added.
Queries sent to Tata Sons and SEBI by the HBL went unanswered.
In the letter, Swamy further said that audit committees of three group companies — Tata Steel, Tata Chemicals and Tata Motors — were not legally elected as provisions for law and regulations for independent directors were not followed. The letter further said that provisions for appointment of independent chairman were not followed.
Swamy said that Chairman of Tata Motors and Tata Chemicals were not independent as he was a trustee of the Ratan Tata Trust and promoter of the companies. SEBI had ignored this fact while taking a decision, alleged the BJP MP.In response to Swamy’s allegations, SEBI had replied to him saying that the group companies’ audit committees had conducted audits. No violation was observed by these committees of any of the provisions of SEBI’s Listing Obligations and Disclosure Regulations, the letter said.