Thursday, March 21, 2013

ICL - A Novel Concept of 'NAL' - Creation tailored for SEBI ?

Acquisitions Beyond 75% Shares in a Company: SEBI’s No-Action Letter

"N-AL' -  Guideline leaving open a 'discretion' to the SEBI Dept. Recommend Action OR No Action !
What then is the purpose or objective of it ?



Broadly speaking, the impression gathered is that ‘no action letter’ (NAL) is not conclusive by itself; for, it is left to the ‘discretion’ of the Departmental authority to decide whether or not to recommend any action in accordance with the guidelines contained therein.  
On that premise, anyone having a concern even remotely, is most likely to be left bewildered,-
as to what really is the concept of ‘ no action letter’ or its intended useful purpose?; and

in any view,  why it is supportable on moral or ethical grounds ?

On a quick reaction, one is driven to believe that this is one of those bizarre instances, commonly come-across in other regimes e.g. the law on income-tax, where the deciding authority is vested with the so-called ‘discretionary power’; creating a sort of ‘cat-on-the wall’ situation. Going by one’s experience, instances have not been wanting in which any such discretion, if not ‘justly’ exercised, have led to socially unpalatable consequences- (intend to add on).

Hopefully, the learned author of the write-up, knowledgeable in such SEBI related matters, should be able to throw more light / air his views, on following:
 Desirability or acceptability of the concept of ‘NAL’ itself; and
in any event, will not, depending on the final decision taken, that be appealable to the Board or the tribunal?

Open to be corrected, in case the implications of the concept of NAL and/or its ramifications have to be understood from a different perspective!


It is high time that the ongoing practice, for long, of vesting an authority with discretionary powers, is thoroughly reviewed; and, to the extent feasible, needs to be eschewed.  

Why so ? Ref.>

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