August 6, 2014
Kalyan Banerjee speaks on the Securities Laws (Amendment) Bill, 2014 | Transcript
Today I am very candid; I have a very little knowledge to give advice to the finance minister on the aspect of a law, and I am not doing that. Take it that today I am trying to assist you, the opportunity I had got earlier, in earlier 90’s when working as a junior with you in few matters. Never think I am trying to give you any suggestion. I am too small for that.
Sir, the Securities and Exchange Board of India Act, 1992 was enacted for the purpose of increasing confidence of investors in investment. But passage of time has proved that neither authorities under the SEBI have acted in true spirit of the Act, nor the Act does have appropriate provisions to pin out the real culprits. Inaction on the part of the authorities under the SEBI Act, lackadaisical attitude of the authorities under the SEBI Act have reduced the entire spirit of the Act in our country. Sufficient provisions were not there; because of the inaction and the non-making of the provisions, steps were not taken against the erring stockbrokers, sub-brokers, share transfer agents, other intermediary and non-banking institutions who are associated with the securities market, and to refund money to the poor investor itself.
Sir, chit funds have grown up in the country like mushroom. In our State, from 1984, large number of chit funds have been started to function. But these chit funds have not been registered under the SEBI Act itself. And for long three decades (SEBI Act has come in 1992; before that the another Act was there), the chit funds which have not been registered have functioned according to their own whims and nobody has touched them. I am not blaming the current finance minister at all or the finance ministry. But I am just pointing out, Sir, since you are here, I can expect that under your supervision the provisions of the Act should be implemented throughout the country very expeditiously as soon as possible.
We are happy that, based on the experience gained over the years gone, this Amendment Bill 2014, provides for stringent provisions for adjudication and special court for dealing with the offences. Sir, in our country there is no dearth of law, sufficient laws are there; problem is their execution. Acts are not being executed in time by the authorities. The authorities under the SEBI are not executing the Acts at all. Possibly they have not understood what are the aims and objectives of the Act itself and what are the responsibilities given to them.
Sir, I will request in future the government, specially the hon. finance minister, to consider making a provision for taking steps for refunding the money of the poor investor. Sir, I want to just intimate you, you are aware about the facts that in our state. In Sanchayita’s matter Calcutta High Court has exercised the jurisdiction and appointed a committee, whose function is to return the money to the poor investors. And those orders have been upheld by the Supreme Court. For last 20 years the matter is still continuing for the purpose of returning the money to the investors. Because SEBI Act did not make such provisions earlier at all. Why no steps have been taken by the authority under the Act for decades together against the non-financial institutions dealing with the chit fund who have not registered under the Act at all?
Sir, I have a very humble view I am expressing to you. Why the title is chit fund? The reading of the title would say the country is encouraging chit fund. On the contrary I have a suggestion, in future try to amend the title, at least the Chit Fund Regulatory Act may come; this type of title is not at all encouraging one. The code under the act is an institution, I am not oblivious to the fact that the appointment of the Chairman of the Board was under challenge and the Supreme Court has upheld it. That is the question of legality. The person should be very clear man, clean man, nobody should speak against him. This standard is needed for someone who would be the Chairman of SEBI.
Sir, it cannot afford for the sake of vibrant democracy, to be politically motivated, its functions should be transparent, and it should have complete autonomy. It should not have any political agenda. It should act only for the public interest. It should not act as another Central Bureau of Investigation in our country. For decades we are seeing CBI is only being used for the purpose of politics. It should not be used like that. CBI has not given anything Sir. I am telling you a fact, in 8 cases in our State, CBI has not yet completed the trial at all. Handing over cases to CBI is now a fashion today. Sir, I have a suggestion. Please tell the Income Tax Authorities Sir, I have a small suggestion, to investigate who are the big investors in chit funds, what is the source of their money for investing in chit fund etc.
Sir my experience of a body like tribunal is not good. I tell you two weeks back, I had to go to the Company Law Board at Calcutta; the matter was after recess, it was a first matter. The judge came at 3.45 PM. Almost all tribunals Sir are functioning like this. Mr Jaitley is here as finance minister and is a top legal luminary of our country; I have deepest respect for him. Since you are here kindly make them act, I mean all the tribunals so that they function properly and on time. They should act independently without having any political agenda, without having any motive. There should be a standard for the people in SEBI, Chairman or any other members of the Board. Their behavior, conduct, past records and everything should be above all boards.
Sir, in our State we have enacted an Act akin to the amendment but incidentally and unfortunately because of the communication during the tenure of last UPA, the act did not get the assent of the hon. President. Kindly do not behave like the last UPA II, kindly instill confidence under your leadership. The investors should get confidence, people should get confidence and believe that there is a person under whose supervision all the erring persons will be booked and trial would be made.
In the Clause 22 you have made a provision that a High Court Judge should be appointed, having background experience of such cases; he should be appointed in the Board itself as a Chairman, Similarly you have made a provision that with 7 years experience as an advocate, he can be appointed as a prosecutor. My humble suggestion to you Sir is that provision should be made for having experience of the criminal trial. This is my humble suggestion to you for future consideration. With this I thank you Sir, for giving me extra time. I am grateful to you.
