No role in Panama probe, got no info on Mallya from UK’S FCA: Sebi

THE CAPITAL market regulator Sebi has told the Supreme Court that it may not have a role in investigation into the Panama Papers and claimed that UK’S financial regulator has not shared with it any specific information or report about alleged round-tripping of money by business tycoon Vijay Mallya.

“So far as Panama Papers leaks are concerned, no action at Sebi’s end is warranted as the allegations, prima facie, does not fall within the regulatory ambit of Sebi,” the regulator said in an affidavit on Thursday.

Sebi said that the government and other agencies such as CBI, ED and CBDT, have already taken cognizance of the Panama Papers leaks and that it was ready to cooperate with such agencies as and when required.

Sebi has filed its affidavit in response to a PIL moved by Delhi-based lawyer ML Sharma, who has asked for a CBI investigation into Indian offshore bank account holders named in the Panama Papers, published by The Indian Express after an eight-month investigation in collaboration with the International Consortium of Investigative Journalists.

Sebi further refuted Sharma’s accusations that it has failed to act in the last seven years despite getting specific inputs from UK’S monetary regulator Financial Conduct Authority (FCA) about illegal round-tripping in six accounts that belonged to Mallya.

Sebi said: “As regards the allegation that the FCA had provided specific information to Sebi about various Indian companies about illegal use of funds/unaccounted money, it is denied that Sebi has received any specific information and investigation report from FCA, except in one case i.e. Reliance ADA Group.”

In case of Reliance ADAG, Sebi said, enforcement action was taken and a consent order was passed upon payment of Rs 50 crore and certain prohibition on the company and its directors.

The affidavit added that Sebi has concluded probe in three cases after conducting inquiries on its own. “In other cases, investigation is in progress primarily because of want of specific information from FCA,” contended the regulator, adding it could submit details of ongoing investigation confidentially to the court. A bench led by Justice Diapk Misra will hear the case on Monday.

Sebi has also replied on Sharma’s plea for directing the CBI to seize all documents relating to P-notes and restrain the offshore portfolio investors from withdrawing the money till further orders of the court.

The affidavit stated that the Sebi has taken adequate steps to regulate Offshore Derivative Instruments or Foreign Portfolio Investors be revamping the mechanism and ushering in a stricter regime by imposing limits on the transfer of P-notes and seeking more disclosure.

Citing two circulars dated June 10 and June 29, the Sebi said that it has acted on the recommendations of the Supreme Court-appointed SIT on black money and laid down norms for transferability of ODIS, reporting of suspicious transactions, periodic review and modified ODI reporting format.

Owing to the revised norms, the Sebi claimed, P-notes made up for just 9.2 per cent of total foreign investment inflow in May 2016, against over 55 per cent in 2007.

“Being conscious of the misuse of Pnotes/odis, Sebi has tightened the norms towards P-notes in a significant way starting 2011. The regime of P-notes now is exactly on the lines for Indian DIIS. Besides, through the Multilateral MOU signed with the International Organisation of Securities Commissions, Sebi is in a position to obtain any data from any of the countries who are signatories of Commissions,” read the affidavit, seeking dismissal of the PIL.

Owing to the revised norms, the Sebi claimed, P-notes made up for just 9.2 per cent of total foreign investment inflow in May 2016, against over 55 per cent in 2007