Toi Editorial: Retired Madhabi Puri Buch, remember this scam of the stock market, what is the lesson?

The three -year term of Madhabi Puri Buch as the SEBI chief ended last Friday. But cases related to his/her work are still going on. When she was in office, she was accused of confrontation of interest and avoiding the call of the Public Accounts Committee of Parliament. Now a special anti -corruption court has ordered a complaint against him/her and other SEBI officials to file a complaint in the listing of a company. It is being said that this company was allowed to list in the stock market without fulfilling the rules, causing damage to investors. The court has said that at first glance it seems to be a case of ‘regulator lapse and collusion’. It is difficult to prove allegations of collusion and corruption on the heads of the hospitals. Another former head of SEBI, CB Bhave, was accused of allowing MCX-SX to act as a complete private stock exchange. But a few years later the case was closed. Last year, SEBI removed the charges citing lack of evidence in the NSE co-location case.

This can also mean that no one has seriously investigated. The allegation was that some traders were allowed to install their servers with the NSE server to benefit in doing business faster. They could trade rapidly with their rivals. A former NSE head, who was allegedly accused of receiving orders from a mysterious person in the Himalayas, was also acquitted.

Since its establishment in 1988, SEBI has faced several high-profile scams. Some scams such as Satyam cases included connivance of auditors. But it is the truth that SEBI failed to protect investors. The 1992 Harshad Mehta scam, when the Sensex rose four times in a year, shook the trust of investors for a long time. Then Ketan Parekh scam and IL&FS collapsed. In the Sahara case, SEBI ordered investors to return ₹ 25 thousand crores, but even after 13 years 10% has not been returned.

Indian stock markets are not new, but the middle class strong participation in it is still a decade old. Every month, when foreign investors were withdrawing money, the middle class still maintained their trust in SIP. Nevertheless, since last October, the Sensex shows a decline of more than 10,000 points that the market is still so critical. Rapid investigation is necessary to maintain the trust of investors. This can convince people that the market disturbances will not be spared.

Also, SEBI needs to monitor his/her monitoring and rules so that such scams do not happen in future. Investors should also be careful and invest only after taking complete information. They have to understand that the stock market continues to fluctuate and there is always a risk in investment. The government and SEBI will have to work together so that investors remain confident and the stock market will be a safe and transparent place.