Mumbai : The Securities Appellate Tribunal (SAT) quashed a regulatory order against top depository NSDL, which was passed by Sebi in December 2008, but implemented about two-and-a-half years later in July 2011 after initially being dismissed as ‘null and void’.
The orders required National Securities Depository Limited (NSDL) to conduct an independent inquiry to fix individual responsibility for failure at NSDL in the wake of IPO and demat scams between 2002-2006. After hearing NSDL’s appeal against these orders, SAT ruled that independent probes have already been carried out by depositories and remedial measures have been taken after ascertaining that there was no individual complicity, reports PTI.
“Therefore, at this belated stage directing the appellant (NSDL) to institute fresh inquiry to fix individual accountability … is wholly unjustified and unreasonable.”
NSDL and CDSL came under scanner in 2006 in connection with the IPO scam, wherein various entities had fraudulently cornered shares reserved for retail investors and sold them later after the listing.
The committee, comprising the then Sebi board members G Mohan Gopal and V Leeladhar, was constituted in 2008 to look into NSDL’s role in the IPO scam and it found various lapses on the part of the depository and had asked NSDL as also Sebi itself to take corrective measures.
Incidentally, Mohan Gopal in December 2010 wrote to the Prime Minister that Sebi board abused its powers to protect its then Chairman C B Bhave from facing an independent inquiry with respect to his actions as NSDL Chairman during the IPO scam.
Sebi declared the two-member committee’s probe into the matter as ‘non-existent’ at a time when Bhave was serving as chairman of the regulatory authority.