It is time Madhabi Puri Buch and the Board of SEBI applied the same standards that they would expect from the Board of a listed company if the CEO was under a cloud
Madhabi Puri Buch, chairperson, Securities and Exchange Board of India (SEBI). Image: Niharika Kulkarni/NurPhoto via Getty Images
One of the more capable and effective institutions of independent India is the Securities and Exchange Board of India (SEBI). After its toothless origins in 1988, the SEBI Act 1992 equipped it with significant power. Successive heads of that institution have put that authority to good use—mostly.
SEBI can assume justifiable credit for the growth and development of the market from a highly inefficient and (now looking back) tiny market with a capitalisation of Rs 3 lakhs crores and less than 1 percent of the population participating in it to a market cap of more than Rs450 lakh crore market, close to 4 crore investor depository accounts and so on.
Not that its record has not been unblemished. Observers point fingers at its tardiness in enforcement, holding the guilty to account, returning the proceeds of ill-gotten gains of unscrupulous market operators, and so on. It could have done a lot more to foster a culture of research that will aid evidence policy making.
However, by and large, one has to acknowledge SEBI’s role in shaping the development of the securities market. One has to equally acknowledge that SEBI chiefs have stayed clear of controversies, barring the as-yet unclear role of the then SEBI Chief in the co-location episode.
It is against this backdrop that the recent developments surrounding the current incumbent appear troubling. When Madhabi Puri Buch assumed that office, the government was departing from the tradition of appointing a bureaucrat to that office. Although technically, she was a whole-time member by then, the markets and remote observers like myself looked at her as someone from the private financial services industry with exalted academic credentials.
[This article has been published with permission from IIM Bangalore. www.iimb.ac.in Views expressed are personal.]