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SHRI A.C. JOS : That is what I have also said.

SHRI KIRIT SOMAIYA : I support your point. That is why, initially I said that this is a good Bill. But some corrections may be needed. So, the hon. Finance Minister can form a small group which can interact with the small investors or the hon. Members like you. Whatever positive corrections are to be made to strengthen the investor protection measures, they can be made subsequently.

मान्यवर, मुझे बताया गया है कि टेक-ओवर और वॉयलेशन में अधिकतम पेनल्टी पांच लाख है। अब अगर कंपनी को २५ करोड़ का फायदा होता है तो वह पांच लाख रुपये देकर छूट जाती है। इसलिए कंपाउंडिंग ओफैंस एक नया फैशन बन गया है। इसमें भी आपने लिखा है कि अधिकतम पेनल्टी पांच लाख या एक करोड़ या कुछ और है। मैं पूछना चाहता हूं कि उसके पश्चात क्या होगा? एक बड़ा वचित्र केस चल रहा है। उसमें चार लाख अस्सी हजार रुपया भर दिया, लेकिन अगर उसके बाद में वह ट्रांजैक्शन नल एंड वॉइड करना चाहे तो वह नहीं हो रहा है। टि्रब्यूनल के संबंध में जो ऑब्जर्वेशन किये गये हैं वे भी में आपके सामने रखना चाहूंगा।1 "The "proper proceedings" in which a complaint from an investor can be disposed of by SEBI is the investigation procedure provided under Chapter V of the 1997 Regulations. There is hardly anything before the Tribunal to show that SEBI had carried out any investigation."

Shri A.C. Jos has suggested that there should be some qualification for the members and President of SEBI. I fully endorse his views. While making the suggestion, being a lawyer himself, he has said that lawyers who are practicing in the company law area and SEBI area should be accommodated as directors and simply retired persons should not be accommodated. The people who are from Civil Services have got a very soft landing after having retired from the service. That type of landing has to be eliminated. People who are active in the field, who are actually doing some business or who are company secretaries, who are active in that field, who have specialised in that field, who are academicians in that aspect, who are the practicing lawyers in the field of company law, should be accommodated as directors with sumptuous salary for them so that better guidance is given by SEBI. If proper guidance is given, then the companies will have the regulation, just like the western countries are doing it.

About co-ordination amongst regulators, a high level committee under the Governor, RBI and consisting of the Finance Secretary and the Chairman, SEBI is in place, after the recommendations of the previous JPC. It meets periodically to cover these issues.

Hon. Member Shri A.C. Jos is not present here but I would briefly refer to issues raised by him because he took the trouble – being an hon. Member and a gentleman from the law – of going through each clause as it were and suggested this clause ought to have this provision and like suggestions. I wish to place on record this in regard to what he said about the clause on investigation. I would request him to please understand that the present Bill is an amendment of the parent Act. It does not eliminate the parent Act. The parent Act also contains powers for summoning of persons, production of books and inspection of books and registers. The proposed investigating authority would be appointed by the SEBI. As such, there would be sufficient safeguards. It would not be arbitrary.

In respect of clause 4, the words, ‘information on record’ would include all forms including electro-magnetic. As provided in clause 6, the reference to the Magistrate for search and seizure is necessary to avoid abuse of powers. It is in line with the Companies Act. The objective of clause 29 is to reduce delays and to avoid unnecessary litigation and so such a power is necessary.

The hon. Member Shri A.C. Jos and various other hon. Members have raised a point about the qualification of members. The original Act, I would like to clarify and state categorically already has provisions such as experience of law, finance, economics, accountancy, administration, etc. Therefore, it was not felt necessary that in the Amendment Bill it should again be repeated. माननीय सभापति महोदय, आपने भी कुछ आपत्तियां बताई थीं, मैं उस बारे में भी बताता हूं। A number of hon. Members have expressed an apprehension about the enlarged membership from six to nine. I would like to assure that it would not be filled only with civil servants but it would take into account all the professions.