As a strong votary of transparency in corporate India, regulators too "cannot escape the scrutiny of their working " as they are, in several cases, empowered as "mini states" with vast powers, Chairman of the Securities and Exchange Board of India (SEBI) Mr U K Sinha said at an ASSOCHAM event.
Delivering the 19th JRD Tata Memorial Lecture under the aegis of the ASSOCHAM in New Delhi, Mr U K Sinha said, it was time to pause and think "whether we are creating too many institutions to ensure accountability or should we aim towards more accountability in more institutions".
He cautioned the large companies as well about the narrative of public accountability now extending to corporates; a phenomenon earlier restricted to politicians and bureaucrats.
He said whenever a large episode of misconduct is detected , a perception gets built about "regulatory capture" coming in the way of effective action. Giving examples of outcry on ponzy schems, the SEBI Chairman said while a need was felt to further empower the regulators, it is also then incumbent on the regulators to be accountable to Parliament and public.
This is all the more true because in several cases in several countries the regulators are given powers equivalent to "mini states" enjoying quasi-judicial powers along with executive powers which in many cases have Parliamentary backing by way of sub-ordinate legislations or "rules" which are attached to the main laws.
"In the FTSE 100 companies, the CEO's pay is 180 times more than the average pay of employees. In the USA, the pay of S & P 500 CEO was 204 times more than the median pay of workers in 2015...".
In the Indian context, Mr Sinha said the SEBI has noticed and stopped instances where small insignificant private companies were being merged with the listed companies at a huge valuation primarily to provide gain to the promoters at the cost of other shareholders.
However, the SEBI chief pressed for checks and balances to ensure that in the name of accountability the very functioning of the regulators is not throttled.
He cited examples how in the course of SEBI's probes into the ponzi schemes, public interest litigations and criminal complaints were filed against the regulator. But, the courts, have played a commendable role in this regard. "Courts have shown remarkable maturity and restrain".
Mr Sinha also touched upon the issue of gender sensitivity among the Indian firms which still do not measure up to the global standards despite improvement in the last five years.