The finance ministry on Tuesday hit back at former Sebi member K M Abraham for making “defamatory” allegations against finance minister Pranab Mukherjee and his advisor, Omita Paul. The ministry has alleged the accusations were made by Abraham after he was denied an extension.
The ministry not only countered his charges point by point, but also accused him of making efforts to continue as a whole-time Sebi member for another two years.
“The recent allegations made by Abraham are defamatory, devoid of any truth and are a complete distortion of facts. In fact, numerous complaints were received against Abraham from several sources,” the ministry said in a media statement on Tuesday. “The letters that have a bearing on the conduct of Abraham were received since the beginning of January 2010, including those from several MPs.”
An email query to Abraham remained unanswered at the time of going to press. Attempts to reach him over phone also failed.
Abraham retired last month as a whole-time member in Sebi after three years of service, most of which was during the tenure of Sinha’s predecessor C B Bhave.
“The complaints (against Abraham) ranged from abuse of power to corruption and purchase of a flat at a concessional rate from an entity that had benefited from the sale of office space to NSE which is regulated by Sebi and of which Abraham was a whole-time member with the jurisdiction to decide on many issues of critical importance to NSE,” the ministry said.
It said references were also received on the alleged links between Abraham, NSE and NSDL in the issue of Sebi’s role in trying to save NSDL from the IPO scam that led to a loss of Rs 115 crore. The CVC and DoP&T had also referred a complaint against Abraham from an MP to the finance ministry.
The ministry alleged that failing in his efforts to continue at Sebi, Abraham tried to be the head of National Institute of Securities Markets (NISM) on the basis of a recommendation made by previous chairman C B Bhave without submitting a panel of names as was required under the relevant rules.
After the ministry advertised the post of a whole-time member in April, Abraham sent a letter to the Prime Minister, alleging interference by the finance ministry in the affairs of Sebi in a host of cases through present chairman U K Sinha.
“The allegations made against the finance minister or his advisor that any pressure was put on Sinha to manage any case whatsoever or that the regulator’s integrity has been undermined are false, vexatious and defamatory,” the ministry said.
In its defence, the finance ministry quoted phrases from a letter of Sinha where he characterised the allegations as “a figment of imagination”, “unfounded” and “motivated”. Sinha added Abraham was “frustrated” as he was neither given an extension as a Sebi member nor given the post of director, NISM, for which he canvassed with the chairman to a “state of embarrassment”.
The ministry also refuted allegations that it interfered in Sebi matters. It said the advisor to the finance minister did not know Abraham and she had never spoken to him. Equally, nobody from the ministry, much less the finance minister, had ever tried to in any way to interfere with any case pending with Sebi at any level, the release said.
The statement also clarified the CVC had not requested the finance ministry to send their responses on both sets of allegations — Abraham’s and those made by Sinha.
