CVC directs Finance Ministry to check vigilance clearance given to Sebi Member

NEW DELHI: The Central Vigilance Commission (CVC) has asked Finance Ministry to check whether a whole-time member of market regulator Sebi was given vigilance clearance in accordance with the rules over three years ago.
The move follows a direction from the Delhi High Court on a petition filed before it in this regard.

It was alleged in the petition that Prashant Saran was appointed as a Whole Time Member at Sebi (Securities and Exchange Board of India), for the second time in August 2012, without proper vigilance clearance from the Chief Vigilance Officer (CVO) of Department of Economic Affairs (DEA).

In a letter to the DEA Secretary in Finance Ministry, the CVC said the petition has further alleged that the vigilance clearance was instead accorded by CVO, Sebi.

Referring to a direction from the court to it, CVC said it has looked into the matter and asked the Finance Ministry to take the necessary action.

"Necessary action may be taken on the issues raised in the petition with particular reference to the validity of vigilance clearance accorded to Shri Saran and its effect on its appointment as Whole Time Member, Sebi," it said in the communication to the DEA Secretary.

When contacted, an official in the DEA said the matter is being examined. Queries sent to the Sebi spokesperson did not elicit any response.

The PIL had also claimed that two officers were denied appointment to the post of Whole Time Member of Sebi due to non-adherence of vigilance clearance from CVC.

CVC further said the petition has alleged that Saran's appointment "was made despite an ongoing investigation by CBI against him on the issue related to Bank of Rajasthan and vigilance clearance was issued by CVO, Sebi despite pending complaints against him."

Saran's second tenure at Sebi comes to an end next month after he attains age of 65 years. The Finance Ministry had earlier floated an advertisement for appointment of a Whole Time Member in his place.

He had joined Sebi from the Reserve Bank of India in May 2009 for a three-year tenure. Later in 2012, he was given a second term for five years or until he completes 65 years of age.