Union minister says 'larger forces at work' behind probe against former Sebi chairman

Union minister Jairam Ramesh has come out in support of C. B. Bhave, former chairman of Securities and Exchange Board of India (Sebi) against whom the Central Bureau of Investigation (CBI) lodged a preliminary enquiry (PE) for alleged irregularities in granting sanction to MCX Stock Exchange (MCX- SX).

Slamming the CBI action against Bhave and ex- SEBI member K. M. Abraham, Ramesh said on Tuesday that " there are larger forces at work". " Mr Bhave is one of the most outstanding IAS officers.

He brought integrity to our capital market. Abraham is one of the most diligent, one of the most honest, one of the most straight forward officers you can think of.

...I think there seem to be larger forces at work here," Ramesh said.

"I know that he ( Bhave) was personally recruited in Sebi by G. V Ramakrishna ( former Sebi chairman).

I know that the Prime Minister has the highest regard for his integrity," Ramesh pointed out.

Ramesh's attack on the CBI came on a day when former home secretary G. K. Pillai also lambasted the premier investigative agency and came out in strong support of Bhave and Abraham. Pillai said that his decision to resign as chairman of MCX- SX was in part a protest against the CBI's move. Calling the PE against Bhave " atrocious" Pillai said that he has " no doubt whatsoever" about Bhave's integrity and the fact that he has taken decisions in a professional manner.

The CBI has alleged that Bhave and Abraham gave permission to Jignesh Shah's Financial Technologies Group to set up an exchange despite a report from the finance ministry that the Group had been raided by the Income Tax ( I- T) Department in 2007 for suspected tax evasion.

However, Bhave has pointed out that the original letter from the finance ministry regarding the income tax investigation came during the tenure of his predecessor M. Damodaran. Besides, Sebi had taken a policy decision in 2007 that a mere probe was not enough to deny approval. Bhave took over as Sebi chairman in 2008 and held the post till 2011.

Bhave has stated that he only agreed with Damodran's 2007 decision and if a case had to be filed, it should have included his predecessor as well. He has also pointed out that Sebi permitted Shah to run the exchanges when there was a show- cause notice issued declaring the promoter not " fit and proper" by the regulator. According to Bhave, if three Sebi chairmen take the same view, than it is odd to single out one of them.

Courtesy: Mail Today