Still, this will be probably the first instance of Sebi revisiting an issue previously dismissed by it, as also an unprecedented case of the regulator being open to a report, where its own role has been criticised.
The committee, comprising of 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, as also the Sebi itself.
Sebi declared the findings as ‘null and void’ on the ground that the committee had breached its mandate in making these charges.
However, Sebi has now agreed to revisit the matter after an intervention by the Supreme Court.
Commenting on the case, Sebi’s former Executive Director Sandeep Parekh said that Sebi should be open to its self criticism.
Replying to emailed queries, Parekh said: “I believe that Sebi should be open to self critical examination. In the specific case, the Board seemed to have assumed powers of a writ court by setting aside a quasi judicial order”.
“This appears without power and so the Supreme Court is giving a chance to the new board of Sebi to reverse its previous action,” Parekh said, who is an expert on financial market laws and runs financial sector boutique law firm Finsec Law Advisors.
The Mohan Gopal Committee’s findings would come alive again at Sebi’s next board meeting, but the regulator would consider the contents of the report as “recommendations and suggestions” rather than a stricture against any entity, including Sebi, sources said.
The issue may still open a pandora’s box, as the charges were made against NSDL for a period when it had C B Bhave as its chief, while 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.
While Bhave had rescued himself from the meetings whenever the NSDL matter was discussed, it has been still alleged in various court petitions that he might have influenced the decision of other Sebi board members.