As stock market was crashing on counting day: Gandhi family loyalist appointed to Sebi panel
Modi-led NDA govt will look into the swift appointment of Usha Thorat as head of Settlement Guarantee Fund (SGF), a key panel of market regulator Sebi, on counting day (June 4), on which stock market plunged by 6%
image for illustrative purpose
![As stock market was crashing on counting day: Gandhi family loyalist appointed to Sebi panel As stock market was crashing on counting day: Gandhi family loyalist appointed to Sebi panel](https://www.bizzbuzz.news/h-upload/2024/06/10/1913325-usha.webp)
Lady In Question
- Sebi hurriedly appointed Usha Thorat as head of SGF panel
- New govt to take up enquiry into how a Gandhi family loyalist was appointed to chair a Sebi’s key panel
- She is close associate of Rahul Gandhi family
- She was former RBI’s Dy Governor, the wife of Yashwant Thorat, Nabard ex-chairman
- He’s also CEO of Rajiv Gandhi Foundation
Consequences
- FIIs resorted to short selling heavily
- Majorly it led to crash by over 6,000 points for Sensex, 1,500 points for Nifty
- BSE may have to pay heavily to SGF for huge spurt in volumes
- NSE last year paid Rs5,000 cr to SGF
- Interestingly, ratio of notional volume in derivatives on BSE is 3x higher than NSE
- It’ll affect BSE profitability, share price
Mumbai: Guess what will be the first and foremost task to be executed by the new government at the Centre immediately after Narendra Modi take charges as Prime Minister for the third time in a row on June 9?
The first important task of Modi 3.0 will be to set up an investigation panel to find out how was a Gandhi family loyalist appointed to chair a key panel of the stock market regulator, Sebi that too on the very day of vote counting or June 4 which saw India’s markets incur their worst one-day loss in four years. In fact, Congress leader Rahul Gandhi had held a press conference terming the event of historic stock market crash as stock market scam.
It is to be noted that Sebi hurriedly appointed a Gandhi family close aide and former RBI deputy governor Usha Thorat to head key panel of the stock exchange watchdog, Committee on Settlement Guarantee Fund (SGF) of stock exchanges on the same day the election results were declared, raising eyebrows in corporate circles. The stock market stakeholders seemed to have been highly intrigued by the appointment even before the results were out on that day.
What is the SGF? Well, BSE may have to pay thousands of crores to SGF due to rising volumes at the exchange. Last year, NSE paid Rs5,000 crore more to it. Interestingly, the ratio of notional volumes in derivatives at BSE is nearly three times higher than that at NSE. If it happened so, it would be a major blow to the profitability of the exchange and its fast-rising share price.
Requesting anonymity, a market source familiar with the development, said, that “the deafening silence by top corporate leaders on the Prime Minister Narendra Modi Economic Advisory Council (PM EAC) was notable as the same has caused confusion and upset the volatile markets falling more than six per cent on the results day even though BJP and its alliance partners together had secured a comfortable majority with 293 seats and despite the fact that BJP alone emerged as the single largest party on the day.”
The capital markets regulator had set up an ad-hoc committee chaired by Usha Thorat on Tuesday, the day of vote counting, to review the ownership and economic structure of clearing corporations (CCs) for suggesting measures to ensure that clearing corporations function as resilient, independent, and neutral risk manager.
The day marked heavy sell orders by large foreign institutional investors (FII) mounting the largest ever short-selling bet in the Indian markets, leading to a massive 6,000 points fall in the Sensex and nearly 1,500 points fall in Nifty index.
The lady in question, Usha Thorat is the wife of Yashwant Thorat, who after retiring as the Chairman of Nabard in November 2007, was made the CEO of Rajiv Gandhi Foundation, a private trust of the Gandhi family with Sonia Gandhi as its chairperson and Rahul Gandhi, Priyanka Gandhi and P Chidambaram, as board members.
Thorats are considered to be confidents of the Gandhi Family. Not only this, Usha Thorat was appointed Deputy Governor of the Reserve Bank of India (RBI) by the then Congress Finance Minister P Chidambaram during the UPA regime.
Highly placed source revealed that the Centre’s first task post formation of the new government will be to know what compelled Sebi to make this appointment on that very day without even bothering to go for proper background check before giving the key position in a platter.
Earlier in 2009, leading stock market research scholars couple Ajay Shah and Susan Thomas held key positions in crucial exchange committees and were awarded high-profile board memberships in NSE’s sister concern companies giving the duo a blueprint of the core workings of the stock market ecosystem and complete insider knowledge.
The likely probe will focus on finding out the name of the high-profile person, on whose instance Sebi made such a hasty appointment on the day much before the final tally of the poll result came out. Another source said that the needle of suspicion also points towards KP Krishnan, who as a former Finance Ministry head, had his influence over Sebi.
Advising traders and investors how to behave in such turbulent market, Shiv Parekh, Founder & CEO, hBits, says: “When building a diversified portfolio, it’s crucial to have multiple investments that are not correlated and that can yield long-term results.”