Expressing concerns over a fast-growing grey market in the financial sector, Sebi chief U K Sinha on Wednesday called for a single watchdog to regulate all entities collecting public money under various illegal means.
The Securities and Exchange Board of India (Sebi) Chairman also pointed that these deposit-taking firms were taking advantage of the loopholes in existing laws and the markets regulator has raised the issue with the government.
“We have also taken up this matter with the government so that the loopholes are plugged,” he said at an investment seminar here, while adding that the government will perhaps come out with a single regulator for these companies.
The comments come at a time when Sebi is fighting a long- drawn case against Sahara group, which has been asked by the Supreme Court to refund over Rs 24,000 crore raised from over three crore investors through issuance of certain bonds without Sebi’s approval. Sebi has been to facilitate the refund after ascertaining the genuineness of investors.
Sahara group has claimed that it has already repaid a bulk of the bondholders and the total outstanding liability is less than Rs 5,120 crore it has paid to Sebi towards refund.
Without naming Sahara group, Sinha said today that a company recently claimed that it has refunded Rs 20,000 crore to the investors, of which 90 per cent in cash in the last 3-4 months period.
Sinha further said that Sebi is worried over the rapid growth of the grey market in the financial sector and called for a single watchdog to regulate companies taking deposits from the public illegally.
“There is a general perception that gold and real estate are villains for the stagnant or falling investments. But, we are worried of the rapid growth of the grey markets in the financial sector. Therefore, there is need for a single watchdog to regulate companies taking deposits from the public in an illegal manner,” Sinha said.
