Indiabulls probe: SC slams Sebi, CBI, MCA for 'passive approach'

Formerly IHFL, Sammaan Cap shares fall 13%

- BHAVINI MISHRA

The Supreme Court on Wednesday came down heavily on the Securities and Exchange Board of India (Sebi), the Central Bureau of Investigation (CBI), and the Ministry of Corporate Affairs (MCA) for what it called a “passive approach” in probing allegations against India bulls Housing Finance Ltd (IHFL), which is now Sammaan Capital.

The case arises from a petition filed by Citizens Whistle Blower Forum, a nongovernmental organisation (NGO), seeking a special investigation team (SIT) probe into alleged irregularities committed by the company. The NGO’s petition alleges that loans were extended by IHFL to companies that routed the money back to firms promoted by IHFL’s erstwhile promoter Sameer Gehlaut.

A Bench of Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh sharply criticised Sebi, flagging what it saw as inconsistencies in the regulator’s conduct. “When the question of taking over properties and selling comes, then you say we are the only authority in the country with jurisdiction. But when the question of investigation comes? Because your officers have some vested interest,” Justice Kant asked.

"(What is the problem) when we are conferring you jurisdiction. When we want to give you some authority, why are you reluctant? Every day we see double standards of Sebi," Justice Kant said.

Referring to a past instance where the apex court constituted a high-powered committee, Justice Kant said Sebi's stand was that it was the only agency that had the right to auction properties.