Government considers reappointing UK Sinha as Sebi chairman for one year

MUMBAI: The race for the chairmanship of market regulator Securities and Exchange Board of India (Sebi) is going down to the wire. On Satuday, February 13, the government held a special meeting to consider a proposal by the finance ministry to reappoint the current chairman, UK Sinha, for a period of one year, said people aware of the unexpected development. This comes after one contender for the post left the field and a second may also exit. Ramesh Abhishek has been named secretary at the Department of Industrial Policy & Promotion and Thomas Mathew is being tipped to take over as the head of the National Investment and Infrastructure Fund (NIIF). They had got the highest grades during the selection process, said the people cited above.

The search-cum-selection committee had recommended a short list of Abhishek, Mathew, State Bank of India chairman Arundhati Bhattacharya and whole-time Sebi member Rajeev Agarwal. The panel, headed by the cabinet secretary, had not made any suggestion to reappoint Sinha, sources said.

The finance ministry subsequently moved a proposal to re-appoint him. This has caused some surprise as the ministry had constituted the selection panel to replace the chairman.

Reappointing Sinha may require a change in rules as the chairman's tenure can't exceed five years. Sinha will complete five years on February 17. A reappointment may also mean that vigilance clearance will have to be obtained afresh as per the current Sebi rules.

"Whenever rules are changed, it cannot be a one-time affair to suit a particular contingency," said a securities law expert. "It has to be there to apply to all and for all times to come."

DR Mehta is the only Sebi chairman who has held the post for more than five years. That was due to exceptional circumstances as the joint parliamentary committee was enquiring into the Ketan Parekh scam. The government of the time had to defend itself against a challenge to that extension in the Delhi High Court.

The six-member search cum selection panel is headed by cabinet secretary PK Sinha. The other members are PK Mishra, additional principal secretary to Prime Minister; DEA secretary Shaktikanda Das, Professor Manoj Panda, director, Institute of Economic Growth; Dr Bimal N Patel, director, Gujarat National Law University; and Professor Rajiv Kumar, senior fellow, Centre for Policy Research.

Securities and Exchange Board of India ( SEBI )