Why the SEBI chairperson should resign

Never in the history of the regulator of India's financial markets the Securities and Exchange Board of India -- has its chairperson's credibility been questioned in such a dramatic manner.

- Paranjoy Guha Thakurta

Although Madhabi Puri Buch the first woman, the first person who was not a civil ser vant and the first person from the private sector to head SEBI had promptly responded to the allegations contained in the second report of the US-based short-seller Hindenburg Research released on August 10, her subsequent silence has been deafening.

Even as hundreds of employees of SEBI have protested against Puri Buch for allegedly encouraging a "toxic work culture" in the organisation, the head of the Zee media group Subhash Chandra has publicly accused her of bribery and corruption yet again, something like this has never happened before. If indeed these allegations are unfounded, and Chandra has provided scant evidence to substantiate his claims, Puri Buch would be well within her rights to sue him for defamation and worse. However, this is yet to take place.

The credibility of the quasi-judicial authority that is responsible for regulating India's capital markets has never been as badly undermined as is happening at present. SEBI was constituted as a non-statutory body in April 1988 through a resolution of the government of India.It became a statutory body in January 1992 after Parliament passed an Act. The preamble to the Act describes SEBI's basic function as a body "..to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto."