HC reserves order on Parekh’s petition

The Mumbai High Court today reserved until tomorrow its ruling on the impugned decision of the appellate authority in the Union finance ministry which upheld the order of the Securities and Exchange Board of India (SEBI), dismissing J C Parekh as the president of the Bombay Stock Exchange (BSE). Parekh had challenged before the appellate authority the order of SEBI which asked him to quit office for his alleged role in rigging of prices of three scrips — Sterlite, BPL and Videocon International. Counsel for Parekh, Anil Dewan and Chandu Mehta, argued that SEBI had no powers to dismiss the BSE president and that the entire order of the regulatory authority was against the principles of natural justice. They argued that the appellate authority had not applied its mind on Parekh’s submissions. Defending the stand of the appellate authority, the Attorney General, Soli Sorabjee, argued that there was nothing wrong in its order. Moreover, he said, alleged failure on Parekh’s part to reportthe matter to governing board of BSE was a serious offence. Parekh had initially moved the High Court which allowed him on April 8 to continue as BSE director until today but restrained him from officiating any meeting of BSE or its governing board. The court had allowed him to move the appellate authority under Section 20 of SEBI Act for seeking interim relief. SEBI accused Parekh of influencing the BSE administration and getting margins reduced besides getting the trading system opened beyond trading hours for select brokers. He was blamed for allegedly not keeping the board fully informed. Parekh was also made ineligible to hold any public position in future as a member of the governing board or as office-bearer of the exchange as well as any capital market-related public institution for a period of three years.