Sebi heat on shady schemes - Calcutta Telegraph

U.K. Sinha (left) in Mumbai on Wednesday. (PTI) Mumbai, April 3: Voicing concern over a fast-growing grey market in the financial sector, Sebi chief U.K. Sinha today called for a single watchdog to regulate all entities collecting public money under various illegal means. The Securities and Exchange Board of India chairman pointed out that these deposit-taking firms were taking advantage of the loopholes in existing laws and the regulator had raised the issue with the government. "We have also taken up this matter with the government so that the loopholes are plugged," he said at an investment seminar. Sinha added that the Centre would perhaps come out with a single regulator for these companies. The comments come at a time Sebi is fighting a case against the Sahara group, which has been asked by the Supreme Court to refund over Rs 24,000 crore raised from over three crore investors through the issue of certain bonds without Sebi's approval. Sebi has been asked by the apex court to facilitate the refund after ascertaining the genuineness of investors. The Sahara group has claimed that it has repaid a bulk of the bondholders and the total outstanding liability is less than Rs 5,120 crore. Without naming the Sahara group, Sinha today said a company recently claimed that it had refunded Rs 20,000 crore to the investors in the last 3-4 months. He added that Sebi was worried over the rapid growth of the grey market in the financial sector. "There is a general perception that gold and real estate are villains for the stagnant or falling investments. But we are worried about the rapid growth of the grey markets in the financial sector. Therefore, there is a need for a single watchdog to regulate companies taking deposits from the public in an illegal manner," Sinha said. Pointing out that many countries have only one regulator to control such sectors, Sinha said, "When the collective investment scheme was brought under the Sebi act, certain exceptions were given to Nidhi, chit funds and co-operatives, which were kept out. But today certain people are taking advantage of those well-intentioned exceptions." via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNH71v9kP8suhA9j7pWyrZbH-d6fTw&url=http://www.telegraphindia.com/1130404/jsp/business/story_16746064.jsp

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