 "Sebi has no black money problem, says Sinha")
Tackling the growth of unaccounted money in the economy is not our job, said U K Sinha, chairman of the Securities and Exchange Board of India (Sebi); its primary task is to curb market manipulation. Even so, he said, information about tax evasion that came to its notice was passed on to the authorities concerned.
Earlier, the Supreme Court-appointed Special Investigative Team had asked Sebi to take measures regarding instruments such as participatory notes (PNs) to curb undisclosed (‘black’) money.
Sinha said the regulator had all the data about entities using PNs. “People are perhaps missing out that from the PNs of three to four years earlier, there is a huge difference today,” he said to a query at an event organised by the PHD Chamber of Commerce and Industry. “Today, we have got all the data about who are the participants in the PNs, who can issue it, who can subscribe to it. All that is very well documented...If you are living in the past...you are refusing to accept the reality of changes that Sebi has been able to bring about in the past four years.”
If someone says it is the primary responsibility of Sebi to check evasion of tax, “I think they are completely misplaced. Sebi’s job is to protect the interest of investors and see that the market is not manipulated,” declared Sinha.
In recent times, there has been rising concern over illegal fund flows in the system and instances that came to the notice of Sebi where the stock market was used to carry out illicit money transactions.
Even so, reiterated Sinha, “Tackling growth of black money or collecting revenue is not Sebi's task. There are agencies in the country who are being paid for this job... You should appreciate that of all the agencies in the government, Sebi is the first one which has by way of doing its normal duty of checking the manipulation of the market also come across an instance were tax was evaded. Sebi has passed on this information to the authorities.”
He said Sebi started a surveillance system on its own. “Nobody asked us to do it. It is a completely wrong impression that somebody asked Sebi to do the checking. We did it on our own,” he added.
Citing an instance, Sinha said two or three years earlier, a change in the unique plan code was one method through which market manipulation was happening and perhaps the riding idea was to evade tax.
“Sebi took that action to check frequent changes in the unique plan code and then passed on the information to the tax authorities; they have to now do the job,” he said.
