In a significant development, the Supreme Court has directed TMC MP Mahua Moitra to approach the Securities and Exchange Board of India (SEBI) with a detailed request concerning the public disclosure of financial details by alternative investment funds (AIFs) and foreign portfolio investors (FPIs). The directive was issued on Tuesday by a bench consisting of Justices B.V. Nagarathna and Satish Chandra Sharma during the hearing of Moitra’s plea, which calls for increased transparency in the financial market.
Moitra’s legal representative, Advocate Prashant Bhushan, articulated concerns over the current regulatory framework, which mandates disclosure for conventional mutual funds but exempts AIFs and FPIs unless their assets under management exceed Rs 50,000 crore. Bhushan emphasized the absence of public disclosure for entities managing assets below this threshold, raising significant privacy and transparency issues.
The bench questioned whether Moitra had previously presented her grievances to SEBI, to which Bhushan responded negatively, citing SEBI’s stance that requiring such disclosures could infringe on investor privacy. Despite this, the justices encouraged Moitra to make a formal representation to SEBI, highlighting the potential impact of non-disclosure on the integrity of India’s financial markets.
Moitra’s Public Interest Litigation (PIL) argues that the lack of transparency surrounding the ultimate beneficial owners and portfolio holdings of AIFs and FPIs contributes to risks of market manipulation, money laundering, and tax evasion. This situation, according to the plea, stands in stark contrast to the stringent disclosure requirements imposed on mutual funds, which promote investor awareness and market integrity.
The court concluded the hearing by granting Moitra the liberty to make a detailed representation to SEBI, asserting that if the regulatory body does not address the concerns within a reasonable timeframe, further legal remedies could be pursued.
