SEBI seeks legal opinion on NSDL order

Capital market regulator Securities and Exchange Board of India (Sebi) on Monday said it will seek an outside legal opinion on whether the Sebi board has the right to examine the special committee���s orders passed after quasi-judicial proceedings against NSDL. The board has decided to withhold the committee���s orders till such time. The committee was set up after CB Bhave, former NSDL chairman, took over the reins at Sebi.The case deals with Sebi���s investigations into 21 IPOs that hit the market during the period between 2003 and 2005. Sebi���s probe revealed that shares reserved for retail investors were illegally acquired by various entities through000 of fictitious applications.The regulator will seek legal counsel on whether the committee has acted within the ���framework and terms of reference��� established by the board resolution.The panel, comprising National Judicial Academy director, G Mohan Gopal and former RBI nominee on the Sebi board V Leeladhar, had ordered that the depository should strengthen its internal systems and institute an independent probe to fix individual responsibility for NSDL���s alleged lapses. The order also recommends that Sebi establish a code of conduct for depositories.Although the final orders were issued on December 4, 2008 by the bench, they are yet to be implemented or made public. This has in turn led to a controversy within the Sebi board.