The Securities and Exchange Board of India (Sebi) has filed appeals in the Bombay High Court against an order passed by the Central Information Commission (CIC) earlier this month in the RIL insider trading case. Sebi has preferred appeals in all the three matters covered in the CIC order directing disclosure of information. These appeals were likely to come up for mention in the court early next week, people involved in the matter said.
Earlier, the Bangalore-based lawyer who had sought the details under the Right to Information (RTI) Act had filed caveats in the Bombay High Court to prevent any ex-parte stay on the matter.
On November 6, CIC had directed the market regulator to reveal the identities of a dozen entities involved in short-selling Reliance Petroleum shares in the derivatives segment in November 2007. The commission also said the regulator had to share the details of the investigation report and consent order proceedings in this matter. In the third matter, it also said the file notings and other relevant documents that led to the inception of the consent-order mechanism in 2007 be revealed.
| FIGHT TO INFORMATION A sequence of events |
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Sebi had challenged this on grounds similar to those it had raised at the CIC appeal, said the people who had seen the appeals. In all these cases, the chief public information officer of Sebi had not disclosed any information, claiming, “(a) the quasijudicial proceedings were in progress and the disclosure of such information would impede the process of investigation already underway; and (b) the desired information was exempt in terms of sub-section 1(d), (h), (e), (g) and (j) of Section 8 of the RTI Act”.
These sections provided for exemptions, under which information in the nature of commercial confidence that could also affect the competitive position of a third party could be withheld, said lawyers.
While the appellate authority had upheld this position, CIC, the apex body under the RTI Act, had said these exemptions did not apply in the present case.
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Pointing out that the matter had been unresolved for several years, pending a final decision, the commission said in its November 6 order: “Several entities have been identified by Sebi who were involved in the insider trading/short-sale of shares of Reliance Petroleum in 2007. The details of these entities are still not in the public domain. After carefully considering the facts of the case and the submissions made before us, we are inclined to agree to the demand of the appellant that the disclosure of this information would serve a larger public interest.”
CIC added: “If, as a regulator, Sebi took cognizance of allegations of any breach of law, rules or regulations by one or more entities for unlawful private gain, the information generated in the process of its investigation needs to be disclosed in the public domain. Such disclosure would keep the general public informed and educated about the risks they might confront in making investments in the market. It would also prevent many entities from adopting shortcuts to make profit through unlawful means.”
The argument that at the end of the quasijudicial proceedings, the charged entities might be found innocent could not be an argument against disclosing the information, the commission had said.