In a spirited defence of cabinet colleague Sushma Swaraj in the Lok Sabha last week, Finance Minister Arun Jaitley said: “There are many people in this country whose children have to work for a living.”
Speaker Sumitra Mahajan was listening intently. What applies to children perhaps applies to brothers, too, she must have thought. After all, Jaitley’s ministry has given her elder brother and lawyer, 75-year-old Arun Sathe some work by nominating him as a part-time member of the Securities and Exchange Board of India (Sebi).
To be sure, a part-time member of the market regulator might not be good enough to ‘earn a living’. According to some old Sebi agenda papers, such members were even as late as 2009 entitled to a sitting fee of Rs 1,000 per board meet, set by the Sebi Act, 1992. On its busy years, Sebi might have about a dozen board meetings.
Further, the ministry has defended the appointment as follows: “He is well-qualified to be a part-time member of Sebi. I do not see any reason for controversy from what we have checked; he has high integrity. We did our own checks before appointing him,” Finance Secretary Rajiv Mehrishi told PTI.
Since the ministry did its checks, it would have come to know that Sathe is related to the Speaker. True, being a relative of someone does not disqualify anyone from any post. But, is the ministry not aware of the damage done to the credibility of the institution?
For example, Sebi has been trying to get companies to clean-up their related party transactions. What moral authority would it now have with such ‘related’ parties sitting on its own board?
The Financial Action Task Force, the global watchdog on unaccounted money, requires regulators such as Sebi to keep a tab on politically exposed persons (PEPs) and their transactions. If its own board has people like Sathe, who are closely related to a politician and actively connected to political organisations such as the Rashtriya Swayamsevak Sangh, how will Sebi be able to convincingly discharge its duties?
Also, how did the ministry zero in on this former Bharatiya Janata Party national executive member and RSS functionary? What was the process followed? Sathe himself has said he did not apply for the post.
What made the ministry overlook several retired Sebi officers, who would have been in a better position to contribute in board meetings with their working knowledge of securities’ law and the market?
There has been much hue and cry about the appointment of Gajendra Chauhan to the top post in the film institute. Our financial market architecture is much more critical for the progress of the nation than the film institute. Sebi’s independence and credibility is important to keep our financial markets attractive for global investors, which in turn is critical to drive economic growth.
Yet, Sathe’s appointment has not attracted even a fraction of the mindspace, even though it may be seen as the beginning of a dangerous trend of overt politicisation of Sebi.
With the selection of a new Sebi chief coming up in months, the political establishment seems to be testing the waters with Sathe. A feeble protest now would only encourage the disastrous event of a ‘Gajendra’ taking the best room in the eighth floor of Sebi Bhavan, six months from now.
