Regulatory lapses could hurt investor confidence: Cong amid SEBI row
Jairam Ramesh said that recently released data reveals that NSE’s unique registered investor base. (Photo: ANI)
Amid controversy over Hindenberg’s allegations against Sebi chief Madhabi Buch, the Congress on Tuesday said regulatory lapses and conflict of interest may be ignored temporarily but could damage investor sentiment and confidence in the long run.
The opposition party also said that the Indian stock market has been well regulated so far but any setback could threaten its stability.
Jairam Ramesh, Congress general secretary and in-charge of communications, said recently released data reveals that the number of registered investors of the National Stock Exchange of India (NSE) with unique PANs has crossed 10 crore.
He said the direct implication of this is that integrity and transparency in financial markets are important to a large and growing number of Indians, especially the youth.
The average age of these investors is 32 years and 40 percent of all investors are under 30 years, Ramesh said, citing the NSE.
According to him, financial markets operate on the assumption that regulators supervise fairly and that companies comply with the rules.
“But if the SEBI chairman is found to have a serious conflict of interest, and that too with regard to investigations into alleged money laundering and recruitment by the Adani Group, then this becomes a serious matter that affects the confidence of millions of investors,” Ramesh said in a post on X.
He argued that regulatory shortcomings and conflicts of interest may be harmless in the short term, but could be damaging to sentiment and confidence in the long term.
The politician also claimed that confidence in the markets had been shaken by the Narendra Modi-induced market volatility after the counting of votes on June 4, 2024.
“On May 13, the self-styled Chanakya told investors in an interview… ‘I advise you to buy (shares) before June 4. It will skyrocket.’ A few days later, the non-organic PM… reiterated that the stock market would break records on June 4,” Ramesh said.
He pointed out that Indian stock markets have so far enjoyed higher valuations than emerging markets because of our well-regulated markets and professionally managed companies.
“Any erosion of these pillars by regulators under a cloud or by a Sarvagyaani prime minister who considers himself an expert in every field (think the demonetisation disaster) risks destabilising the Indian market,” the Congress leader said.
Ramesh’s comments come days after US-based short seller Hindenburg Research launched a tirade against Securities and Exchange Board of India chairwoman Madhabi Buch, alleging that she and her husband had stakes in obscure offshore funds used in the Adani money scandal.
Buch and her husband have since denied the allegations, saying their finances are an open book.
Adani Group has also described the latest allegations by Hindenburg Research as malicious and manipulative of selected public information. According to the group, Hindenburg Research has no commercial relationship with the SEBI chairman or her husband.
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First publication: Aug 20, 2024 | 2:57 PM IST