UBS case: SAT chief Rajaratnam resigns

Securities Appellate Tribunal (SAT) presiding officer Justice Kumar Rajaratnam has resigned amid controversy over the UBS Securities case relating to the stock market crash last May. The resignation letter was sent to the Finance Ministry on Friday. The resignation coincides with market regulator Securities and Exchange Board of India (Sebi) rejecting the suggestion from the SAT to allow UBS to go for “plea bargaining” for a possible amicable settlement and comes within the days of Justice Rajaratnam recusing himself from the UBS case. “I have no comments to offer. There is no difference with Sebi, and it has co-operated with us and we have cordial relations,” Rajaratnam said. “I do my judicial duties and they (Sebi) do theirs. UBS matter will go in accordance with the law,” he said on whether his action had anything to do with the differences between SAT and Sebi over the UBS case. During the course of hearing on July 18, Justice Rajaratnam — who served as the chief justice of Madhya Pradesh High Court — had suggested that Sebi consider “plea bargaining” and a penalty of Rs 500000000 on UBS, an FII registered with Sebi. UBS was banned from issuing overseas derivative instruments (ODIs) including participatory notes (PNs) for its alleged involvement in May 17, 2004 stock market crash. Sebi officials said they did not have any idea about the SAT presiding officer’s decision to resign. They clarified that Sebi counsel Rohit Kapadia’s media statement could not be purported to be from Sebi. “In fact Sebi has sought adjournment from the court on the UBS case as it was seeking a new senior counsel,” a Sebi official said. Sebi counsel Rohit Kapadia had gone on record on Monday saying that his client (Sebi) was not interested in the SAT suggestion with respect to “plea bargaining” and would like the case to continue under 11(B) of Sebi Act, 1992. This prompted Rajaratnam to recuse himself from hearing the case.