Sebi member selection hits CVC hurdle

Ashish Rukhaiyar
Mumbai, 4 October 2011

The Securities and Exchange Board of India (Sebi) will have to wait a little more to get two new whole-time members on board. According to people familiar with the development, the selection of at least one candidate has hit the Central Vigilance Commission (CVC) hurdle. This could delay the whole process.

According to reports, former Central Bank of India chairman and managing director, S Sridhar, and Rajeev Agrawal, a 1983-batch Indian Revenue Services (IRS) officer, have been selected for the members’ post. Industry sources, however, say Sridhar’s selection has been stuck at CVC, as the bank and the former chairman have been named in the V K Shunglu Committee report over alleged irregularities in the Commonwealth Games (CWG).

“Central Bank (of India) was the official banker for the Commonwealth Games and has been named in the report, along with Sridhar, who was at the helm when the games were organised,” said a person privy to the development. “This has led to his selection getting stuck at CVC, though he has said in the past that the allegations are baseless,” he added on the conditions of anonymity.

The Shunglu Committee has alleged in its report that Sridhar was “personally interested” in CWG contracts as a relative was posted in London and was part of the CWG Organising Committee. Sridhar, when contacted, declined to comment on the issue.

Meanwhile, the probe committee has also alleged some irregularities on the bank’s part on matters like accounting treatment of certain expenditures, purchase & distribution of free tickets and entering into sponsorship agreements without prior approval of the finance ministry. Reports, incidentally, suggest that Sridhar has refuted all these allegations, calling it “baseless” that his relative influenced any of his decisions.

The developments would come as a severe blow to Sebi, which has been functioning with only one whole-time member (WTM) since July, when M S Sahoo and K M Abraham retired. At present, Prashant Saran is the lone WTM at Sebi.

Interestingly, Agrawal’s selection has also got delayed due to these developments because, industry sources say, the government wants to notify both the names together and, therefore, is waiting for all the necessary approvals. Once the CVC clearance is received, the names will be sent to the Cabinet’s Appointments Committee, headed by Prime Minister Manmohan Singh.