That little something you thought you heard when you were calling your stockbroker may be Sebi listening in.
Businessmen, market punters and investors beware. To the long list of government agencies that are already entitled to tap your phone, you can now probably add market watchdog Sebi.
The conviction of former McKinsey boss Rajat Gupta on charges of securities fraud in the US—basically for passing on insider information to Raj Rajaratnam—may have shocked many Indians, but one Indian agency which was mighty chuffed by the verdict was Sebi.
Reason: what nailed Gupta was phone-taps. Sebi now thinks it should be listening in to conversations by suspected insider traders and has sought changes in the law to allow it to do this.
According to a report in The Economic Times, the Sebi request was discussed at an inter-ministerial meeting attended by bureaucrats from telecom and home affairs – and the idea apparently found support. If Sebi finally gets to put its ears to the proverbial insider keyhole, the Indian Telegraph Act will have to be tweaked to give it these powers.
India’s corporate bosses and insiders had better watch out. Even as the Supreme Court is hearing a petition on the invasion of privacy filed by Ratan Tata due to the leaking of the Niira Radia tapes, the law may be changed to allow even more officials to eavesdrop.
Currently, it is the enforcement and intelligence agencies that get to listen in. Among them: the CBI, the Intelligence Bureau, the tax authorities, the economic surveillance agencies (Central Economic Intelligence Bureau and the Directorate of Revenue Intelligence – DRI).
If all goes well, Sebi’s eager beavers will be cocking an attentive ear to listen to conversations between businessmen, executives and brokers.
If UK Sinha, Chairman of Sebi, gets his way on telephone-tapping, there’s no reason why Reserve Bank’s D Subbarao should not also want to entertain himself with what businessmen are discussing. After all, RBI is the big dada of regulation, and what Sebi gets, the RBI surely won’t want to deny itself. It would have even more justification: who knows, crooks may talking of ways to remit illegal money in and out of India.
However, the problem is the complete lack of safeguards against misuse of telephone tapping rights. Till date, no one has been identified or punished for leaking the Niira Radia tapes. The Indian Express noted on Friday that the DRI listened in to conversations involving the family members of the Central Board of Excise and Customs (CBEC), but no action has been taken. And remember, both CBEC and DRI come under the finance ministry.
Clearly, the scope for misuse is huge and not one illegal wiretapping case has been brought to justice so far. Given the complete lack of accountability among the snooping agencies, privacy is likely to go for a further toss.