Tackling black money growth is not the task of Sebi but it is pro-active in curbing market manipulations and information about tax evasion that comes to its notice is passed on to the authorities concerned, its chief U K Sinha said today.
“Anybody who says that it is the primary responsibility of Sebi to check evasion of tax, I think they are completely misplaced. Sebi’s job is to protect the interest of investors and see that market is not manipulated,” the Sebi Chairman said here.
In recent times, there have been rising concerns over illegal fund flows in the system and there have been instances that came to the notice of Sebi where stock market was used to carry out illicit money transactions.
“Tackling growth of black money or collecting revenue is not Sebi’s task. There are agencies in the country who are being paid for this job.
“You should appreciate that of all the agencies in the government Sebi is the first one which has by way of doing its normal duty of checking the manipulation of the market also come across an instance were tax was evaded. Sebi has passed on this information to the authorities,” Sinha noted.
Participating at an event organised by industry body PHD Chamber, Sinha said that Sebi started surveillance system on its own.
“Nobody asked us to do it. It is a completely wrong impression that somebody asked Sebi to do the checking. We did it on our own,” he added.
Citing an instance, Sinha said two or three years back, change in the unique plan code was one method through which market manipulation was happening and perhaps the riding idea was to evade tax.
“Sebi took that action to check frequent changes in the unique plan code and then passed on the information to the tax authorities and they have to do the job now,” he said.
Responding to a query on apprehensions that Participatory Notes (PNs) are being misused, Sebi chief said the regulator has all the data about entities who are using PNs.
People are perhaps missing out that from participatory notes system of 3-4 years back, there is a huge difference today, he noted.
“Today we have got all the data about who are the participants in the participatory notes, who can issue it, who can subscribe to it, all that is very well documented.
“If you are living in the past…you are refusing to accept the reality of changes that Sebi has been able to bring about in the last four years,” Sinha said.
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