Jayalalithaa seeks Chidambaram's resignation

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Chennai, Jun 12: Continuing her offensive against Union Finance Minister P Chidambaram, AIADMK general secretary J Jayalalithaa today dismissed as a lie, the Minister's claim that investments from abroad were being monitored by SEBI and demanded his resignation.

In a statement here, she said Mr Chidambaram's claim that foreign investments were monitored by regulating agencies like SEBI, have been proved false in the Goldman Sachs (Mauritius) case. ''The case is not only a loss of face for SEBI, it is also a clear indication that the Union Finance Minister's claim that investments from abroad are being adequately monitored is a lie,'' Ms Jayalalithaa said and asked why should the Minister lie on a matter concerning national security.

''Are we to infer that he has certain vested interests in doing so? Now that his lie has been publicly nailed, will he quit office? If he refuses to do so on his own, will the Prime Minister, an economist himself, throw him out and ask the CBI to investigate what is happening?'' she asked.

The former Chief Minister said India's security -- external, internal and economic -- was far more important than the personal likes and dislikes of people in power.

Stating that terrorism was on the rise and there were clear indications that these anti-national activities were being funded from abroad, she said it was time for the government to act as tomorrow would be too late.

Giving details of the Goldman Sachs Investment case, Ms Jayalalithaa said SEBI had in September 2006, slapped a fine of Rs one crore on Goldman Sachs Mauritius for the latter's failure to report the issuance of P-notes to the Mauritius-based Magnus Capital Corporation Limited. This was considered a violation of the declaration to furnish regular investments to SEBI on the P-notes issued by them. However, on May 5 last, the Securities Appellate Tribunal (SAT) set aside SEBI's order against Goldman Sachs Mauritius.

SAT felt SEBI was not at all justified in asking FIIs and their sub-accounts to file undertakings of the kind prescribed in the revised reporting format contained in the circular of August 8, 2003.

''SAT also overturned SEBI's fine of Rs one crore on Goldman Sachs and instead asked the market regulator SEBI to pay Rs one lakh to Goldman Sachs,'' Ms Jayalalithaa said.

She said only last week, Mr Chidambaram had ridiculed her for her ''complete lack of understanding on the FII regime that is in force'' for akkeging that P-notes provided total anonymity to investors from abroad.

She had expressed fear that incursion of illegal funds like funds from terrorist organisations, narcotics smugglers or black money of Indians smuggled out through the hawala route could have been brought into the Indian capital and stock markets through P-notes and called for abolition of the P-notes system.

However, Mr Chidambaram, refuting her charge, had said FIIs were regulated entities and SEBI being the regulator, FIIs were required to report at the end of every month, in the prescribed format, all the information relating to P-notes issued by them, including the names of subscribers of the said P-notes.


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