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Wednesday, Oct 27, 2021
Outlook.com

'Don't Point Fingers At Us'

SEBI chairman Devendra R. Mehta, in an interview to Outlook, admits he's under pressure from all quarters and wants sweeping powers to prevent a recurrence of operator-driven volatility. Excerpts:

'Don't Point Fingers At Us'
'Don't Point Fingers At Us'
outlookindia.com
-0001-11-30T00:00:00+05:53
On why sebi isn't probing Ketan Parekh:We don't go by individuals just like that. We need proof. The probe's begun and you'll see results by March-end. Licences of operators found guilty of rigging the markets to artificially depress prices will be cancelled. We are already probing First Global Securities and Credit Suisse First Boston. We are probing entities like Ajay Kayan, Nirmal Bang and R.S. Damani. Rathi has gone and many more could be on their way out. You won't see any discrimination.

On KP's track record: He is an accused in the Canbank Mutual Fund case and the hearing is on. sebi can't stop people accused of committing a crime from raising money from the markets. How can we do that? It is for investors to decide whether they want to invest in a firm promoted by such people. All we can do is tell the issuer to provide full details about the promoters.

On sebi's own investigations: I can't give specific details. But we have taken up 58 cases in January alone this year which shows it's an alarming situation. For example, we picked up about 56 cases throughout last year.

On bank funding: Bank lending against shares is a big cause of the payment problem. Bank funds are being openly misused through fronts and multiple firms. Money is raised by pledging shares and then reinvested to ramp up the same scrips. Even small cooperative banks like Ahmedabad's Madhavpura Cooperative Bank went into this lending spree. But is it for us to look into the situation when the Reserve Bank of India is present?

On FII sub-accounts: We are probing their ownerships. We have definite information that a lot of fii trading is really local money rerouted. But don't blame sebi for that. The finance ministry has made it easy for people to misuse fii sub-accounts by routing their foreign funds through such accounts. The...
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