Abraham case: Report submitted to PMO

The Finance Ministry has submitted its report to the PMO and the CVC,among others,relating to a case in which former whole-time Sebi member K M Abraham had made certain allegations against higher-ups in the government and the market regulator. “We have submitted our comments to the Prime Minister’s Office (PMO),the Central Vigilance Commission (CVC) and the Department of Personnel and Training (DoPT) in the Abraham case. Now,it is up to them to take action,” a senior Finance Ministry official said. The controversy relates to allegations levelled by Abraham against top functionaries in the Finance Ministry and Chairman of the Securities and Exchange Board of India (Sebi) U K Sinha. In a three-page clarification issued on Tuesday evening,the Finance Ministry had said that the charges levelled against the Finance Minister and his Adviser were “devoid of any truth and are a complete distortion of facts”. The Finance Ministry said that it has received numerous complaints,including the ones from several MPs,about Abraham’s conduct,while references have also been received from the CVC and the DoPT. Abraham retired from Sebi last month and has lodged complaints with the Prime Minister about alleged interference by the Finance Ministry in the functioning of Sebi,including in cases relating to major corporate entities such as the two Reliance groups,ICICI-Bank of Rajasthan,MCX-SX,Sahara group,Reliance Industries and Anil Ambani (ADAG) companies,. In letter dated June 1 to Prime Minister Manmohan Singh,Abraham had complained that Sinha told him that the Finance Ministry wanted the regulator to go slow in these cases. The letter was forwarded to the Finance Ministry,which later sought response from Sinha on the issue. Sinha has denied any interference by the Finance Ministry in the market regulator’s functioning and termed the allegations made by Abraham as baseless. Terming these allegations as a “figment of imagination,” Sinha wrote to the Finance Ministry on July 8 that Abraham was “suffering from persecution complex and delusion and is erratic in behaviour”. The Finance Ministry also said that the “allegations made against the Finance Minister (Pranab Mukherjee) or his Adviser (Omita Paul) that any pressure was put on Sinha to manage any case whatsoever or that the regulator’s integrity has been undermined are false,vexatious and defamatory”. The Ministry said that it has been receiving numerous complaints against Abraham since January this year. “The complaints ranged from abuse of power to corruption and purchase of flat at concessional rate from an entity that had benefited from the sale of office space to NSE,which is regulated by Sebi...,” it said. The Ministry said that the reference has been received on Abaraham’s alleged links with NSE and NSDL in the issue of the Sebi’s role in “trying to save NSDL from the IPO scam that had led to the loss of Rs 1150000000”. It said that Abraham was “making efforts to continue as a Whole Time Member for another two years” and also tried to secure a position at National Institute of Securities Markets (NISM) on the basis of a recommendation made by the former Sebi Chairman C B Bhave. Having failed in getting an extension,Abraham wrote to the Prime Minister “alleging interference by the Ministry of Finance in the affairs of Sebi in a host of cases through the present Chairman,Sebi,” the Ministry said. “Abraham has attempted to put words in the mouth of Chairman,SEBI,that some sensitive cases engaged the attention of the Finance Minister or his Adviser,” the ministry said. Sinha apparently wrote to the Finance Ministry on July 8 that Abraham was worried about the safety of his family members and exhibited a strong element of insecurity. There have been reports that Abraham has again written to the Prime Minister,expressing concern about security of his family members in the wake of his complaints having come into public domain. Sinha had also written that “Abraham was frustrated as he was not neither given extension as SEBI,Whole-Time Member,nor given the post of Director,NISM which he canvassed with the Chairman to the state of embarrassment.”