Accusing the market regulator of “evading investigations” against the Tatas on complaints made by him, BJP leader Subramanian Swamy has asked the Securities and Exchange Board of India (SEBI) to order a “comprehensive” probe, else he would approach the courts for redressal.
“It is not for SEBI to rely on self-certification from the companies who themselves are under investigation and abdicate their legal and fiduciary responsibilities,” Swamy said in a letter written to SEBI Chairman Ajay Tyagi on September 28, 2017.
The letter levels allegations against Tata Steel, Tata Motors and Tata Chemicals.
“Is it appropriate for SEBI to delegate an investigation to the very companies who are the subject matter of the investigation, whether or not it is done by the audit committees or otherwise?” he asked.
Swamy also said that SEBI’s response on insider trading allegations against Tatas was “just plain prevarication.”
Asked to react to Swamy’s letter, Tata Motors declined comment. “We will not comment as you may check with (the) Group,” a spokesman for the company said.
When approached, Tata Sons spokesperson also declined comment.
Similar emails sent to Tata Steel and Tata Chemicals went unanswered till the time the story was moved on the wires.
Expressing his dissatisfaction regarding the response from SEBI to an earlier letter, Swamy in his missive said: “I can only conclude that SEBI is trying to avoid and evade the investigations which are its responsibility under law just because the allegations have been made against the Tatas.”
He said Tatas themselves had been accused in “both the 2G scam and the coal scam especially arising from deplorable revelations before the Supreme Court in the Niira Radia Tapes” matter.
“The result is that the audit committees at Tata Steel, Tata Motors and Tata Chemicals are not legally constituted as they do not comply with the provisions of the Laws and Regulations for the definition of an Independent Director,” the letter stated.
“Furthermore, the provision for an Independent Chairman of the Audit Committee has not been complied with as the Chairman of the Audit Committees of two companies namely Tata Motors and Tata Chemicals is clearly not independent,” being a Trustee of the Sir Ratan Tata Trust.
Unless SEBI sets up a comprehensive investigation into the three complaints made on each of the companies, under the chairman’s supervision, Swamy said, “I shall have no alternative but to approach the courts.”