Sinha rules out hasty action against SEBI

By Our Special Correspondent

NEW DELHI, APRIL 7. The Union Finance Minister, Mr. Yashwant Sinha, today declared that the Government is determined to get to the bottom of the entire issue of stock price manipulations. But he ruled out any hasty action against the Securities and Exchange Board of India (SEBI) as this would have to wait till the inquiry report was submitted in mid-April.

He stressed that the role of market regulators in the stock market turmoil would be determined only after the report was submitted. He maintained that the only charges against the regulator, SEBI, could be of ``slackness'' in taking timely action but this would have to come out in the report.

Speaking to newspersons on the sidelines of a function organised by the Institute for Studies in Industrial Development, Mr. Sinha insisted that no conclusions or opinions could be offered on the issue before having a look at the report which was expected in the middle of this month. But the Government had no intention of deflecting from its determination to reach the bottom of the entire affair.

On the issue of the Madhavpura Cooperative Bank, the Finance Minister felt the matter needed to be examined in detail because the presence of two supervisory agencies - the State Government and the Reserve Bank of India (RBI) - weakened the system. He denied any suggestions, however, that the Government was trying to divert from the issue of market manipulation and emphasised that those found guilty would be punished. In this context, he noted that the fall in stock market was not peculiar to India as there was a simultaneous significant fall in the Dow Jones, Nasdaq and other international markets.

He recalled that he had repeatedly pointed out that concern was not over the level of the indices but the rules of the game and the market players should comply with these rules. He felt that the emphasis should be on removing the weakness in the system. Besides, investors should be ensured a better return in the medium to long term. He declined to comment on the impact of the stock market manipulation on economic but noted that industrial slowdown had had an impact on the economy.

Regarding the arrest of the former chairman of the Central Board of Excise and Customs, Mr. B.P. Verma, Mr. Sinha said the Government was committed to weeding out corruption. The clean-up operation was continuous and it was their responsibility to continue it.

The Finance Minister took the opportunity to commend the Indian Revenue Service for having some of the best and honest officers. He maintained the recent events were unfortunate but those doing their job honestly had nothing to fear and should hold their head high.

On roadblocks facing important economic legislations, he said some bills had been introduced in Parliament like the one on fiscal responsibility and amendments to the Banking Companies Act. He expressed confidence that other major bills would be introduced in the next part of the Budget session.

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