New Delhi: The Supreme Court on Thursday refused to entertain a plea filed by Trinamool Congress MP Mahua Moitra seeking directions to the Securities and Exchange Board of India (SEBI) to mandate full public disclosure of the ultimate beneficial owners and investment portfolios of Alternative Investment Funds (AIFs), Foreign Portfolio Investors (FPIs) and their intermediaries operating in India.
A Bench of Justices B.V. Nagarathna, R. Mahadevan and D.K. Upadhyaya disposed of the writ petition, observing that the relief sought could not be granted in the absence of an existing legal or regulatory framework mandating such disclosures.
However, the apex court permitted Moitra to approach the Union government and SEBI regarding the grievances raised in her petition.
The Justice Nagarathna-led Bench held that in the absence of a legal framework or regulations providing for full public disclosure of ultimate beneficial owners, the apex court could not issue a writ of mandamus under Article 32 of the Constitution to mandate such disclosures.
“In the absence of any such framework, this Court cannot exercise its discretion and issue a writ of mandamus to respondents (authorities) to mandate a full public disclosure,” the Supreme Court said.
During the hearing, advocate Prashant Bhushan, appearing for Moitra, submitted that substantial investments were being made in Indian companies through foreign entities, while the identities of the actual investors remained unknown.
He argued that the lack of transparency raised concerns over possible violations of SEBI regulations and potential manipulation of the stock market by entities investing large sums of money.
Contending that the right to information was a fundamental right, Bhushan submitted that several countries mandated public disclosure of beneficial ownership.
However, Justice Nagarathna-led Bench questioned whether the top court could issue such a direction when no policy mandating the proposed disclosures was in existence.
“If there is a policy that there has to be a public disclosure, and then you are seeking a mandamus that it be implemented, that is one thing. But if there is no policy in existence, can we issue a mandamus?” the apex court observed.
Solicitor General Tushar Mehta opposed the plea, claiming that the petitioner’s attempt was aimed at ensuring that foreign investment did not come into the country.
Bhushan countered the suggestion, submitting that disclosure of the ultimate beneficial owners would not harm legitimate investment.
In its order, the Supreme Court recorded that disclosures relating to investments made by AIFs and FPIs were being furnished to SEBI or custodians, enabling regulatory oversight. However, it held that there was no existing legal framework requiring public disclosure of entity-wise investments in the manner sought by the petitioner.
(IANS)
