The central government on Friday told the Supreme Court that it was confident of being able to defend the appointment of UK Sinha as chairman of the market watchdog Sebi. The court was hearing a public interest litigation filed by a number of prominent individuals, including a former chief of the Indian Air Force, which had questioned the manner in which the Union government had constituted a search committee to select the chairman and other members of the Sebi board.

Attorney General Goolam Vahanavati said allegations that appointment rules were tweaked under the influence of some corporate houses were baseless. Apanel of three judges, headed by the Chief Justice of India, SH Kapadia, said it will decide later whether to issue notices to the ministry of finance, Sebi and its chief along with the cabinet secretary after going through the affidavit filed by the Centre.

Vahnavati said the affidavit will explain in detail the procedures followed in appointing Sinha and other Sebi board members. "We are pushing for a more transparent mechanism on the appointment of regulators by the Government of India so that independent professionals are appointed in these posts. The Sebi example is illustrative of the larger issue. The core plea seeking quashing of the appointment remains.

We have nothing against Mr Sinha personally," says a person close to the petitioners. The normal procedure is for affidavits to be filed after the court issues notice. The bench, whose other members are Justices AK Patnaik and Swatanter Kumar, will hear the case on November 22.

Gopal Subramanium, the former Solicitor General of India who represented the petitioners who include S Krishnaswamy, the former chief of Air Staff, the former head of the Punjab police chief Julio Ribeiro and former CBI joint director B R Lall, argued that the "manipulation" of appointments to bodies such as Sebi will hurt investor confidence.

The petition challenges the constitution of a search committee in July 2010, which selected Sinha as Sebi chairman on the ground that two members of the committee were appointed by the finance minister. "There are clear indications that there is a nexus between the ministry of finance and major corporate players and that the free and fair functioning of Sebi is no longer possible," the petition alleged. (Economic Times)