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Ministries sort out differences over SEBI Act

Finance and Law ministries on Friday ironed out their differences over providing more powers to market regulator Securities and Exchange Board of India for search and seizure of companies to prevent recurrence of scams.

The differences were sorted out at a 90-minute meeting, Law Minister Arun Jaitley had with Finance Minister Yashwant Sinha.

Official sources said the two ministers have agreed to grant limited powers to SEBI with certain safeguards to prevent any misuse.

Economic affairs secretary C M Vasudev and Company Affairs Secretary V K Dhall and the SEBI chairman G N Bajpai will meet next week to work out the details.

The details, after the Cabinet's approval, would be incorporated in the Bill to amend the SEBI Act that might be placed in Parliament in the monsoon session.

Besides search and seizure, SEBI would be armed with powers to hike penalty in the event of non-compliance by companies.

Presently such powers are provided only to agencies like Enforcement Directorate and Central Bureau for investigation.

Expressing its reservations over granting such powers to SEBI, law ministry had earlier said SEBI being a quasi-judicial body could not be given such sweeping powers.

The law ministry felt it would not be in the best interest of the corporate as the Department of Company Affairs was already empowered to inspect books of accounts under Companies Act.

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