The Supreme Court today refused to entertain a plea seeking a direction to the Centre, RBI and market regulator SEBI that the offshore portfolio investors, who invest in Indian stock market through Participatory-notes, be bot allowed to withdraw the money till further orders.
The vacation bench of Justices A M Sapre and Ashok Bhushan rather told lawyer M L Sharma that the interim plea would be heard by the bench which had issued notice on his main PIL.
P-notes are derivative instruments issued by registered foreign portfolio investors to overseas investors to enable them to trade in stock market here without getting registered with SEBI.
The interim plea, which was filed in a pending PIL seeking CBI inquiry against Indian offshore bank account holders named in the Panama papers, was mentioned before the vacation bench by Sharma.
"Please go before the bench that had issued the notice on your PIL," the bench said.
The lawyer referred to recent proposal of SEBI which increases disclosure requirements for issuance of P-notes and said this will lead to siphoning of monies by the investors.
The new rules enable the regulator to check the complete transfer trail of P-notes money on a monthly basis.
"25 lakh crore rupees black money which is floating in the stock market would be siphoned off. FIIs are Indian investors who have invested through P-notes," he said.
The lawyer, in his plea, has sought an "ex-parte stay" and a direction to the Centre, RBI and the SEBI to prohibit "release/transfer of P-notes" to foreign investors till "further orders".
The plea has also referred to a SIT report on black money and said that Foreign Institutional Investors invest through P-notes since they allow them to earn returns on investment in the Indian market without undergoing the significant cost and time implications of directly investing in the India.
"That in fact more than Rs 25 lakhs crores values of P-notes are in circulation in India in stock/ financial market. It is a black money and come under Money laundering act. But due to illegal protection by the SEBI these are running and SEBI did no action till date," it said.
Earlier, the court had issued notice to the Centre and others on the PIL seeking CBI inquiry against Indian offshore bank account holders named in the Panama papers.
The lawyer, in his PIL, had sought a CBI probe against the
Indian offshore account holders and stock market regulators under the supervision of the Supreme Court.
The Panama Papers leaks contain an unprecedented amount of information, including more than 11 million documents covering 2,10,000 companies in 21 offshore jurisdictions. Each transaction spans different jurisdictions and may involve multiple entities and individuals.
The plea sought direction to CBI to lodge FIR and conduct investigation against the SEBI chairman, his associates, share brokers etc. For alleged offences including under Prevention of Corruption Act and Prevention of Money Laundering Act.
The petition has alleged that Panama Papers includes the names of nearly 500 Indians, including celebrities and industrialists, who have allegedly parked funds in offshore accounts in transactions brokered by the law firm.
