U K Sinha Gets Extension as Sebi Chief

New Delhi: U K Sinha will remain Chairman of the Securities and Exchange Board of India (Sebi) till March 1, 2017 as the government has extending his term for the second time, a move seen as a vote of confidence for continuity at the top amid volatile market conditions.

The extension by over a year for Mr Sinha, approved by the Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi, would make him the second-longest serving Chairman of capital market regulator Sebi in its history of over 25 years.

Mr Sinha was initially appointed for a term of three years during the UPA regime and was later given an extension of two years. While his current term was to end on February 17, he was eligible for a one-year extension as a person can hold the position of Sebi Chairman till the age of 65, which Mr Sinha would reach next March.

"The Appointments Committee of the Cabinet has approved re-appointment of U K Sinha, Chairman, Sebi with effect from February 18 up to March 1, 2017 or until further orders whichever is earlier," a government notification said.

This would keep him in office for little over six years - the second-longest for this position after D R Mehta's seven-year term from 1995 to 2002.

The regulatory ambit of Sebi has further expanded in recent months with the merger of erstwhile commodities regulator FMC (Forward Markets Commission) with it.

Sebi, which regulates stock exchanges, various kinds of market entities including brokers, mutual funds, FIIs (foreign institutional investors), rating agencies and investment bankers, as also thousands of listed companies, was also given greater powers during Mr Sinha's tenure to help it crack down more effectively on market manipulators and fraudulent money-pooling schemes.

There have also been apprehensions that a change of guard at this time can be avoided given the sharp volatility in the capital markets globally.

During his tenure, Sebi has implemented a number of capital market reforms including those related to IPOs, mutual funds and corporate governance. A key initiative announced recently is a new regime for listing start-ups.

Mr Sinha, a 1976 batch IAS officer of Bihar cadre, assumed office as Sebi Chairman on February 18, 2011.

The government in August last year had initiated the process for selecting Mr Sinha's successor at Sebi, and a search panel headed by Cabinet Secretary was also constituted.

However, there could not be any consensus on the names suggested by the panel.

As per reports, the short-listed names included State Bank of India chairperson Arundhati Bhattacharya, former FMC Chairman Ramesh Abhishek and Thomas Mathew, who has earlier served as Joint Secretary (Capital Markets) in Finance Ministry.

Other keenly watched developments during Mr Sinha's tenure have been the action taken by the regulator against hundreds of ponzi schemes and lately against over 1,000 individuals and companies suspected of tax evasion and laundering of black money through the stock exchange platform.

Sebi has also acted against illicit money-pooling schemes from high-profile groups like Sahara, Saradha and Rose Valley, while several big corporates including DLF and Financial Technologies India Ltd (FTIL) have seen regulatory action against them during Mr Sinha's tenure.

Before joining Sebi, the current Chairman was heading UTI Mutual Fund. Prior to that, he had served in Finance Ministry, among other positions, as an IAS officer.

Mr Sinha quit IAS in 2008 when he was holding the rank of an Additional Secretary to the Government of India and was on deputation as Chairman and Managing Director with UTI Mutual Fund. But after quitting civil service, he was given another five-year term as CMD, not as a government nominee but as the choice of the stakeholders of UTI AMC.

State Bank of India (SBI), Bank of Baroda (BOB), Life Insurance Corporation (LIC) and Punjab National Bank (PNB) are the promoters of UTI MF.

Mr Sinha earlier held key positions in the Government of India, notably in the Ministry of Finance, where he was the Joint Secretary, looking after capital markets, external commercial borrowings, banking and currency and coins.

During his tenure at the ministry, he spearheaded several initiatives, such as banking and capital market reforms. The government had in December last year reconstituted the search panel to include a representative from the Prime Minister's Office.

The revamped panel, headed by Cabinet Secretary P K Sinha, included Additional Principal Secretary to Prime Minister, Economic Affairs Secretary and three experts nominated by the central government.

In addition to the post of Chairman, the government is empowered to appoint five members on the board of this key regulatory body.