He might have stirred a hornets’ nest in North Block, Sebi Bhavan and many a corporate headquarters, but Kandathil Mathew Abraham is not shaken by their response. Even as the finance ministry went hyperactive in issuing statements questioning the high-profile whistle-blower’s credentials and integrity, Abraham is in no hurry to settle scores yet.
He will wait for a formal inquiry in the matter before responding to the allegations heaped on him. “I shall formally reply at the stage of any inquiry in the matter,” Abraham told Business Standard.
Abraham has moved to Thiruvananthapuram after demitting office as a whole-time member of the Securities and Exchange Board of India last month. The finance ministry in a late evening release on Tuesday portrayed him as a power-hungry, corrupt officer out to malign the finance minister, miffed at not being given an extension.
Responding to an emailed questionnaire after the finance ministry’s statement, the 1982 batch IAS officer from Kerala cadre also said following his whistle-blower letter to the Prime Minister, it will be against “my code of conduct as a civil servant to respond to these allegations at this stage”.
His June 1 letter, now widely quoted in the media, alleges Sebi chairman U K Sinha was under pressure from the finance ministry, especially Omita Paul, advisor to the finance minister. He alleged the chairman asked him to go slow on some proceedings, including those against Reliance, Sahara and MCX Stock Exchange at the behest of Paul and the minister.
Sinha denied these claims in a detailed response to the finance ministry.
He also alleged Abraham tried to stall a Sebi move, following a Supreme Court directive in the IPO irregularities case involving NSDL.
He referred to the complaints on Abraham buying flats in the same building as the National Stock Exchange. He went on to question Abraham's credentials and found him to be suffering from a “persecution complex” among others. Most of these allegations were repeated by the finance ministry in its Tuesday release.
The ministry said the allegations made by Abraham in the letters “are defamatory, devoid of any truth and are a complete distortion of facts” and went on to add it had received numerous complaints against him since January 2010, including those from Members of Parliament.
Whatever they lead to, the fact is nobody has seen anything like this in 20 years of Sebi.
Interestingly, Abraham's troubles with the Sahara group and MCX-SX begun towards the end of 2009. While Sahara Prime City filed for its IPO in September 2009, Sebi refused to give new segments to MCX-SX unless its promoters divested holdings during the same month.
Many industry watchers find the counter allegations a little shaky. “It seems they are trying to defend their own positions rather than putting the other person in the dock,” said a senior official with one of the large intermediaries.
Some people are floating conspiracy theories as well. “Some entities have been writing letters because they are offended by some orders by Abraham,” the official added.
A senior commentator on financial markets said orders in certain crucial cases were so thorough they impressed even the High Court judges who happened to hear appeals on them. Justice D Y Chandrachud observed the member had grappled with various complex issues and addressed them in detail, while hearing an appeal by MCX-SX earlier this month.
One of Abraham's main grievances is his whistle-blower letter was not dealt with the sensitivity it deserved. According to media reports, he explored all other options to break the alleged corporate-politican-bureaucrat nexus trying to influence his functioning as a quasi-judicial authority. He approached the PMO and checked with the top-most bureaucrat in the country, the cabinet secretary, before writing his letter to the Prime Minister on June 1.
The cases Abraham and his men came to investigate and adjudicate, by design or default, related to entities belonging to some of the most influential businessmen in the country.
Looking at the tough stand taken by both the camps, it’s obvious the last word has not been said on the matter and it might even escalate to the level of a full-fledged probe by the Central Bureau of Investigation.
