Sebi chief's appointment under SC's scrutiny

The appointment of U K Sinha as Sebi chairman has come under the scanner with the Supreme Court today issuing notice to the Centre asking it to respond to a PIL alleging various irregularities in his appointment.

A bench of justices S S Nijjar and H L Gokhale, however, refused to issue notice to the Centre on the plea for a CBI inquiry into appointment of Sinha.

The court passed the order on a PIL filed by one Arun Kumar Aggarwal seeking quashing of Sinha's appointment.

The bench impleaded President's Secretary Omita Paul, who was advisor to the then finance minister, when the decision to appoint Sinha as Sebi chairman was taken.

The impleading was done after it was alleged that the process of selection of SEBI chairman was interfered with due to which incumbent C B Bhave was refused extension and Sinha appointed. It was contended that Sinha had not even applied for the post.

"The earlier Chairman could not get further extension though he was entitled to get extension of two years as per the amended notification," advocate Prashant Bhushan, appearing for the petitioner said.

He submitted that all the authorities concerned including the then Finance Minister had approved Bhave's extension and the file was sent to appointments committee but the file was called back to the Ministry and proceedings for Sinha's appointment was then initiated.

He submitted that the "appointment of Sinha is malafide and a result of deep-rooted conspiracy" and placed various documents which were procured through Righ to Information Act to buttress his allegations.

Paul, who was not made party in the petition, was impleaded with the court saying "only she can answer these allegations".

"Sinha failed to fulfil one of the eligibility conditions as laid down in the SEBI Act which requires that the chairman shall be a person of high integrity. He is not a person of high integrity as is apparent from various facts," Bhushan further said.